On HBR.org's 'Best Practices' blog, Amy Gallo emphasises the importance of keeping your business plan flexible.
She observes: "People make business plans for all sorts of reasons – to attract funding, evaluate future growth, build partnerships, or guide development. Unfortunately, the vast majority of these plans are usually out of date by the time the printer ink dries."
Gallo says the problem lies in the fact that business moves fast, explaining that "the product's features morph, new competitors emerge, or the economic climate shifts".
She adds: "When these changes occur, many people just throw their business plans out the window. For a plan to be truly valuable it needs to evolve with your company and stay relevant in the face of uncertainty."
Gallo says the key to writing a business plan is to create "a living document".
William Sahlman, Harvard Business School professor and author of How to Write a Great Business Plan, advises that "when you think about a business plan, think about the distinction between a snapshot and a moving picture". So what you need is something that will move with your business.
FLUID AND USEFUL
Gallo offers some tips on making your plan a "fluid, useful document".
1) Focus on your biggest asset. Your most important people should feature prominently in your plan. If a technology or discovery is more important to your business than human resources, then focus on that – or whatever it is that has the most value.
2) Describe your experiments. Remember, you're not expected to have it all figured out, especially if you're just starting out. Sahlman says: "Your goal is to describe a path and a series of well-structured experiments to see what you should do next."
3) Include risk assessment and contingencies. You can't expect everything to go exactly as you predict, so detailing the risks and how you will manage changing conditions helps to keep your plan dynamic.
4) Stay flexible with formats. Gallo says: "Using a more streamlined format may prove useful later on if and when you need to write a more elaborate plan. Expanding on a small document is often more effective than trying to condense a large one."
5) Revisit the plan regularly. Make sure you update the plan as circumstances change or progress, and rewrite it if necessary. These reviews should also be used as an opportunity to check that the business is staying in line with your original vision.