business plan and change

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How to Know When to Change Your Business Plan

Sometimes you need to stick to your business plan to make it work. Even a mediocre strategy consistently executed over time is better than a series of brilliant strategies that keep going off in different directions. Strategy often takes time.

On the other hand, there is no virtue in sticking to a plan, just for having stuck to a plan. We live with constant change.

Which brings me to the dilemma that many business owners face:

Do I stick to my plan, or change it? If I change it, then is my plan vs. actual (reality) valid? Doesn't it take consistent execution to make strategy work?

To which I'll add;

“It is better to take many small steps in the right direction than to make a great leap forward only to stumble backward.” – Chinese proverb

I've been dealing with this dilemma for years, as a business owner, entrepreneur, and consultant. I want to suggest some guidelines to help you decide whether to change the plan midstream, or not.

A Good Planning Process

It starts with having a plan that includes priorities, milestones, and expected results. Also, you have to track results and compare them to what you had planned or expected to see. And also, as you developed those expectations, you should have included assumptions.

Ideally you have that process going on already. Without it, there's no plan to change, and you are managing reactively. If you don't have a process of planning in place, start it immediately in order that you have a better planning process later on.

The best time to plant a tree is 20 years ago. The second best time is today. – African proverb

Stay the Course or Revise the Plan?

Take some time each month to review your plan and its results. Once you have the process established, it doesn't take more than an hour or two to get team members together.

Start that monthly meeting with a good hard look at your underlying assumptions. Identify the key assumptions and whether or not they've changed. When assumptions have changed, there is no virtue whatsoever in sticking to the plan you built on top of them. Revise your plan, automatically, when key assumptions have changed.

Then look at the differences between what you planned and what actually happened. Identify key differences between the plan and actual results. Some will be better than planned, and some worse.

For each key difference you discover, and all of them combined, use your best judgment and common sense to determine whether the differences were caused by false expectations or unexpected good or bad execution. Also, consider external and internal factors that may have influenced the results.

Maybe your expectations were too conservative, or too optimistic. In that case, you revise your plan. Use your common sense. Were you wrong about the whole thing, or just about timing? Has something else happened, like market problems or disruptive technology, or competition, to change your basic assumptions?

Maybe you discover you and your team have executed better than expected, or results were better than expected. Hooray. Stick to the plan. It's working.

And maybe you discover that your execution was wrong, poor, or flawed. If any of those reasons are the case, work on executing better and change the plan.

Do not revise your plan glibly. Remember that some of the best strategies take longer to implement. Remember also that you're living with it every day; it is naturally going to seem old to you, and boring, long before the target audience gets it.

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Start » strategy, 5 steps to adapting your business plan to stay nimble.

The best business plans are flexible and updated consistently as the business grows. Here are five steps to adapting your business plan.

Every entrepreneur reaches a point where it becomes necessary to change their business plan. Maybe you aren’t seeing the growth you expected, or maybe a significant industry disruption made it necessary. Here are five steps you can take to adapt your business plan and continue moving your small business forward.

Recognize when it’s time to pivot

The first step is simply recognizing when it’s time to make a business pivot. One of the biggest signs you need to pivot is when things stop working in your business. If you’re not getting the results you expected, this is a sign you may need to do something different.

But you don’t have to wait until things are falling apart to adjust your business plan. By paying attention to changing customer behaviors and preferences, you may be able to stay on top of emerging market trends.

The thought of switching directions before you need to can be scary, but it ensures you have momentum on your side. Acting early means you have the resources available to take advantage of new opportunities before it’s too late.

[Read more: 8 Signs It's Time to Update Your Business Plan ]

Identify needed changes

Next, you need to determine what aspects of your business plan need to change. Do you need to modify your current products or offer an entirely new product or service? Do you need to change your target market or adjust your marketing strategy?

Before you make any significant changes, start by defining your goals and what you hope to achieve. Spend time researching what your customers want and what your competitors are doing. From there, you can identify the necessary changes that need to be made.

[Read more: How This Organic Skin Care Product Business Navigated Supply Chain Challenges ]

Communicate these changes to stakeholders

Once you understand what you’re trying to achieve, you need to share these changes with your stakeholders. Being open and transparent increases the likelihood that you’ll gain their support.

You don’t have to wait until things are falling apart to adjust your business plan.

Segment your audience based on their roles and involvement in your business. Explain why these changes are necessary, the potential benefits and drawbacks, and any action that’s needed from your stakeholders.

Be ready to address any concerns and objections they have. However, this isn’t a one-time conversation, and you should be prepared to involve your stakeholders throughout the entire process.

Regularly ask for feedback from your stakeholders and be prepared to act on their feedback. And be honest about any mistakes that occur during the process — being transparent about the good and the bad will increase their faith in your leadership.

[Read more: How to Communicate a Product Discontinuation to Customers ]

Implement and test these changes

When you’re making changes in your business, it’s a good idea to start small and test the waters first. For example, if you’re making changes to your product, start with a small test group of customers first. This will help you gauge your customers’ reactions and determine whether you should implement these changes on a larger scale.

Through this process, you should continue to monitor your business metrics and make adjustments as needed. Expect that things won’t go as planned and that there will be bumps in the road. Minor setbacks don’t have to derail your plans if you stay flexible.

Stay flexible and willing to adapt

The business landscape is constantly shifting, so it’s important to stay flexible and willing to change your business plan along with it. Companies that are always ready to adapt to changing market conditions will remain competitive.

You should thoroughly review your business plan at least once annually, but you may want to update your financial projections quarterly. The bottom line is that your business plan will never be finished, so you should always be ready to make changes.

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Change Management Plan What is it with Example and How to Create Yours?

Published: 26 December, 2023

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Organizational Development

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Plenty of businesses and business people claim they want to generate change in their companies and industries, but despite having big dreams, very few succeed. We believe the main reason these ventures fail is that they lack a Change Management Plan.

A Change Management Plan is an explicit description of how the different segments of a business will navigate innovation and transformation. The way we talk about change is often metaphorical, or aspirational. Your Change Management Plan will distil your vision into actionable processes that enable the advances you’re looking to make.

In this article, we will discuss how a Change Management Plan is an effective tool for innovation, and how you can use your own Plan as an engine for transformation and growth.

What is a Change Management Plan

The change management plan is a structured approach that an organization follows to successfully introduce and manage changes within the company. It is typically used for significant or complex changes that have a significant impact on job roles and require a more strategic approach to implementation.

The plan outlines the steps necessary to transition from the current state to the desired future state and includes a plan for monitoring and measuring the success of the change.

One popular model for managing change is the 8-Step Change Model, which consists of eight steps that guide an organization through the process of implementing and managing change. The model begins with identifying the reason for change and gathering and analyzing data to understand the current situation.

It then moves on to developing a vision and strategy for the desired future state, communicating the change to stakeholders, empowering employees for success, creating a detailed plan for implementation, and executing the plan. Finally, the model includes a step for evaluating and adjusting the change as needed to ensure its success.

For a more tangible understanding, consider this change management plan example , A multinational company decided to transition from its legacy project management software to a more modern, cloud-based solution. Recognizing the need for change, they conducted extensive surveys and data analysis, revealing widespread dissatisfaction with the current system.

The vision was to improve collaboration among global teams and enhance project visibility. The change was communicated transparently to all stakeholders, and employees were empowered through comprehensive training programs. The implementation plan included a phased rollout, starting with smaller teams before company-wide adoption. Regular evaluations were conducted, and adjustments were made based on user feedback. The new software significantly improved project efficiency, reduced delays, and fostered better collaboration across departments, demonstrating the success of the change management plan.

The 8-Step Change Model provides a structured approach for managing change and can be used in conjunction with a change management plan to ensure a smooth and effective transition.

Your download is now available!

You can now access the complete 8 Step Change Process Package, including a full presentation, related models and instructions for use.

The 8-Step Process For Leading Change

Change management importance, change management can help organizations to:, (1) minimize resistance and increase support for change initiatives..

By having a well-structured change management plan, organizations can reduce resistance to change by effectively communicating the reasons for change and addressing potential concerns.

(2) Ensure that changes align with the organization’s overall strategy and goals.

A change management plan helps ensure that changes align with the overall business strategy and business goals and that the changes are aligned with the organization’s vision and mission.

(3) Enhance the effectiveness and success of change initiatives.

A change management plan helps organizations to implement changes more effectively and increases the chances of success.

(4) Minimize disruption to operations and minimize the impact of change on employees.

By effectively managing change, organizations can minimize the impact of change on employees and reduce disruption to operations, ensuring that the change process is smoother and more efficient.

(5) Improve communication and collaboration during the change process.

A change management plan helps improve communication and collaboration between different stakeholders during the change process, ensuring that everyone is working towards a common goal.

(6) Ensure sustainability of changes by embedding new practices into the organizational culture.

A change management plan helps organizations embed new practices into the organizational culture, ensuring that changes are sustained over time.

(7) Increase the chances of success by anticipating and addressing potential problems before they arise.

By anticipating and addressing potential problems before they arise, organizations can increase the chances of success and reduce the risk of failure.

How do you Write a Change Management Plan?

As you set to write a Change Management Plan, it’s important to remember why you’re writing it to begin with: you want to control the chaos that accompanies any major overhaul of an organization’s way of doing business. Managing the fear and uncertainty that people feel at this time will help change occur far more smoothly; having a clear roadmap of how you’ll bring that change to life is a big help.

Below we walk through the steps involved with writing a Change Management Plan that you can use to move your business forward.

Create the Need for Change

Step (1): Identify the Reasons for change & create urgency

• Create Awareness of the need for change
• Articulate a powerful rationale and business case.
• Open the Dialogue and Create Urgency

Step (2): Form a Powerful coalition and build the guiding team

Assemble and nominate a team with enough power and influence to lead the change effort

Change the Direction

Step (3): Develop a Vision & Strategy for Change

Develop a clear vision of how the future will be different and define a roadmap toward achieving that vision.

Step (4): Communicate the Vision and Strategy

• Use every possible vehicle to communicate the vision and gain buy-in
• Address concerns, lead by example, and reward people

Change Behavio r

Step (5): Empower Actions & Remove Barriers

• Eliminate barriers that impede transformation & empower people to take actions
• Align resources, systems, and structures to support the vision and strategy

Step (6): Create Quick Wins & Celebrate Achievements

• Create visible quick wins
• Identify and Reward change agents involved

Change Sustainability

Step (7): Secure Successes, Accelerate & Build on the Change

• Consolidate and build on the change
• Define goals that ride on the momentum
• Use credibility to change policies and procedures that don’t fit the vision.

Step (8): Make Change Stick & Anchor Change in the Corporate Culture

• Continually articulate the connections between the new way of working & corporate success.
• Weave new corporate culture and style into leadership development and succession planning

Change Management Processes

Change management processes and systems pave the way for successful change management. It is important to be able to submit a change request, and then track, schedule, and manage that request through delivery. A change management system will allow a single storage location for all data associated with organizational changes, standardization of procedures, analysis of trends and activity, and easy access anywhere at any time.

Look for a system that offers the following functionality:

• Ability to break work down into tasks
• Configurable change request forms
• Budgeting and cost controls
• Change log for historical tracking
• Role assignment
• Configurable change management processes
• Schedule of changes (Forward Schedule of Change)
• Ability to classify as a change and reclassify as a defect
• Ability to change the assignment to individuals, teams, and/or Change Advisory or Change Control Board
• Updating changes
• Change monitoring
• Change approvals

Change is inevitable.

No marketplace survives intact forever, and successful businesses adapt as necessary to ensure their growth and prosperity. Additionally, businesses should change purposefully for innovation that makes better use of their resources and competitive advantage.

Following an articulated Change Management Plan will help guide your organization successfully through the decisions you make today for the opportunities you’ll find tomorrow.

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How to Make a Change Management Plan (Example & Template Included)

A change management plan is a critical part of any project plan and can be the difference between project success and failure. Let’s break down how to create one so you can better manage project change, no matter where it shows up in your project life cycle.

What Is a Change Management Plan?

A change management plan is a document that describes how change is planned, implemented and monitored in a project or across an organization. You can think of a change management plan as a roadmap that shows all the steps you need to take from identifying the change to realizing it. This plan not only sets the course by which you can execute the change but asks how it will impact the project or organization, how workflows will be affected and whether it will alter your relationship with your customers or teams.

By using an effective change management plan, you can manage the process and be more productive in its execution. It helps you control the budget, schedule , scope and resources. It even impacts your communication process. In fact, the change management plan is systemic, touching on all aspects of project management. When done correctly, it will minimize the impact on your project or organization.

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Change Management Plan Template

Use this free Change Management Plan Template for Word to manage your projects better.

What Are the Key Elements of a Change Management Plan?

Define the following elements below to create an effective change plan for your project.

Change Management Documentation: A change management plan should include documents and forms that will facilitate the process of evaluating, approving and implementing changes.

• Implementation plan
• Communication plan
• Change impact assessment
• Change readiness assessment
• Change orders and change request forms
• Change management log

Change Management Team: Define who will be doing what in your change management plan. Who has the authority to submit a change order request, who reviews them and who authorizes them? You’ll need to define roles and responsibilities for effective change control.

• Change Control Board: Staff your change control board with people who will receive the change requests and have the authority to approve or veto them.
• Change Champion: These are employees tasked with communicating the change, advocating for it and sharing information with others through the implementation process.
• Change Agent: Change agents have more accountability than champions as they’re involved in the process of planning the execution of change management activities.
• Change Management Software: A project planning software can help you keep track of changes through every project phase until it’s finally resolved.

Project management software can help you execute your plan. ProjectManager has an award-winning Gantt chart that can be used to create your change management plan: organize tasks, link dependencies, set milestones and even filter for the critical path. The plan can be shared with your team, who can use our multiple project views to collaborate better. You won’t find an easier-to-use or more powerful change management software. Get started with ProjectManager today for free!

Change Management Plan Example

This change management plan example covers key areas you’ll need to look for when managing project or organizational changes.

1. Change Description

Begin by defining the purpose of your change, areas of impact, key goals and objectives, the change management model that will be used and any assumptions, risks and constraints that might affect its execution.

2. Roles and Responsibilities

Describe the different change management roles that will help execute the change. Ideally, there should be a change control board in charge of approving or rejecting changes along with other roles such as change agents and change champions.

3. Stakeholder Map

A stakeholder map is a simple chart that helps change management teams identify key stakeholders and prioritize communication efforts based on their level of interest and influence over a project.

4. Gap Analysis

A gap analysis helps contrast the current state of a process, project plan or organization and a desired future state that will be reached through the proposed change.

5. Cost-Benefit Analysis

Depending on the scale of your change, you might need to conduct a cost-benefit analysis to determine whether the benefits of your change outweigh the cost of the resources that will be required.

6. Change Readiness Assessment

A change readiness assessment consists of creating a matrix that evaluates key areas of your organization and assigns them a numeric value to measure how prepared the organization is to implement a change initiative.

7. Change Impact Assessment

A change impact analysis gauges the potential impact of a proposed change based on its scope, cost, timeline and priority, among other things.

8. Implementation Plan

You need an implementation plan to effectively submit, evaluate, authorize, manage and control the change requests. This is an action plan that explains the steps that will be taken to implement a change and a timeline for their execution.

9. Risk Matrix

This risk analysis tool allows organizations to list all the potential risks associated with the change implementation plan and analyze their potential impact and likelihood.

10. Communication Plan

Describe how changes will be communicated by defining what channels of communication will be used and the frequency in which stakeholders will receive status reports , among other important details.

11. Change Order Request Form

A change management document that allows internal team members, clients or any other stakeholder to suggest changes to a project or organization.

12. Change Order Form

Once the change control board approves the change order request, a change order form can be issued to begin executing the change as soon as possible.

13. Change Log

A change log is a document that helps document any changes that have been implemented over time.

This change management plan template for Word combines all the templates above in one document. Download it for free so you can make a change management plan template for a project or organization just like the example above.

How to Make a Change Management Plan

Jennifer Bridges, PMP, breaks down how to create a change management plan in the following video. She explains how change is measured against the project baseline , which is the detailed description of the time, cost, scope and quality of the project that you have determined when planning. Therefore, a change management plan will take that baseline and ask how, what, when, where, why and how to figure out change and how to manage it.

After you watch the video, be sure to try some of our free templates below to help you manage change and your project.

Pro tip: There are different types of change management, and the best way to get a holistic understanding of it is through the triple constraint. There are processes established to help with the change management process , and it’s crucial to know them. Also, keep in mind that change management procedures vary depending on the industry you’re in. For example, change order forms are used primarily in construction to change the scope of projects.

Take it further: Sometimes, when tough changes happen during execution, technical debt can be accrued. Learn all about it and how to minimize it.

Go Beyond Change Management Templates with ProjectManager

ProjectManager is cloud-based work and project management software that connects hybrid teams to help implement change across an organization or project. Real-time data makes it collaborative to the core and multiple project views mean anyone in any department, no matter how, when or where they work can use it the way they want, whether in a task list, Gantt or kanban board.

You’ve seen how a Gantt chart can organize the change management plan but when that plan is assigned to teams that maybe work in a more agile environment, then they need a different tool. Kanban boards visualize workflow and workflows can be customized to automate task approvals, for example. Managers have control and transparency, while team members can manage their backlog and collaborate when planning sprints.

Track Change on the Dashboard

Monitoring change is how you make sure your actual progress is aligned with your change management plan. Our real-time dashboard gets live data and crunches the numbers to display metrics on time, cost and more in easy-to-read graphs and charts. It’s a status report whenever you need one so you can catch issues and resolve them before they cause problems.

ProjectManager is award-winning work and project management software that connects teams for greater productivity. Manage change without impacting your schedule or budget. Get started with ProjectManager for free today!

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5 Critical Steps in the Change Management Process

• 19 Mar 2020

Businesses must constantly evolve and adapt to meet a variety of challenges—from changes in technology, to the rise of new competitors, to a shift in laws, regulations, or underlying economic trends. Failure to do so could lead to stagnation or, worse, failure.

Approximately 50 percent of all organizational change initiatives are unsuccessful, highlighting why knowing how to plan for, coordinate, and carry out change is a valuable skill for managers and business leaders alike.

Have you been tasked with managing a significant change initiative for your organization? Would you like to demonstrate that you’re capable of spearheading such an initiative the next time one arises? Here’s an overview of what change management is, the key steps in the process, and actions you can take to develop your managerial skills and become more effective in your role.

Access your free e-book today.

What is Change Management?

Organizational change refers broadly to the actions a business takes to change or adjust a significant component of its organization. This may include company culture, internal processes, underlying technology or infrastructure, corporate hierarchy, or another critical aspect.

Organizational change can be either adaptive or transformational:

• Adaptive changes are small, gradual, iterative changes that an organization undertakes to evolve its products, processes, workflows, and strategies over time. Hiring a new team member to address increased demand or implementing a new work-from-home policy to attract more qualified job applicants are both examples of adaptive changes.
• Transformational changes are larger in scale and scope and often signify a dramatic and, occasionally sudden, departure from the status quo. Launching a new product or business division, or deciding to expand internationally, are examples of transformational change.

Change management is the process of guiding organizational change to fruition, from the earliest stages of conception and preparation, through implementation and, finally, to resolution.

As a leader, it’s essential to understand the change management process to ensure your entire organization can navigate transitions smoothly. Doing so can determine the potential impact of any organizational changes and prepare your teams accordingly. When your team is prepared, you can ensure everyone is on the same page, create a safe environment, and engage the entire team toward a common goal.

Change processes have a set of starting conditions (point A) and a functional endpoint (point B). The process in between is dynamic and unfolds in stages. Here’s a summary of the key steps in the change management process.

Check out our video on the change management process below, and subscribe to our YouTube channel for more explainer content!

5 Steps in the Change Management Process

1. prepare the organization for change.

For an organization to successfully pursue and implement change, it must be prepared both logistically and culturally. Before delving into logistics, cultural preparation must first take place to achieve the best business outcome.

In the preparation phase, the manager is focused on helping employees recognize and understand the need for change. They raise awareness of the various challenges or problems facing the organization that are acting as forces of change and generating dissatisfaction with the status quo. Gaining this initial buy-in from employees who will help implement the change can remove friction and resistance later on.

2. Craft a Vision and Plan for Change

Once the organization is ready to embrace change, managers must develop a thorough, realistic, and strategic plan for bringing it about.

The plan should detail:

• Strategic goals: What goals does this change help the organization work toward?
• Key performance indicators: How will success be measured? What metrics need to be moved? What’s the baseline for how things currently stand?
• Project stakeholders and team: Who will oversee the task of implementing change? Who needs to sign off at each critical stage? Who will be responsible for implementation?
• Project scope: What discrete steps and actions will the project include? What falls outside of the project scope?

While it’s important to have a structured approach, the plan should also account for any unknowns or roadblocks that could arise during the implementation process and would require agility and flexibility to overcome.

3. Implement the Changes

After the plan has been created, all that remains is to follow the steps outlined within it to implement the required change. Whether that involves changes to the company’s structure, strategy, systems, processes, employee behaviors, or other aspects will depend on the specifics of the initiative.

During the implementation process, change managers must be focused on empowering their employees to take the necessary steps to achieve the goals of the initiative and celebrate any short-term wins. They should also do their best to anticipate roadblocks and prevent, remove, or mitigate them once identified. Repeated communication of the organization’s vision is critical throughout the implementation process to remind team members why change is being pursued.

4. Embed Changes Within Company Culture and Practices

Once the change initiative has been completed, change managers must prevent a reversion to the prior state or status quo. This is particularly important for organizational change related to business processes such as workflows, culture, and strategy formulation. Without an adequate plan, employees may backslide into the “old way” of doing things, particularly during the transitory period.

By embedding changes within the company’s culture and practices, it becomes more difficult for backsliding to occur. New organizational structures, controls, and reward systems should all be considered as tools to help change stick.

5. Review Progress and Analyze Results

Just because a change initiative is complete doesn’t mean it was successful. Conducting analysis and review, or a “project post mortem,” can help business leaders understand whether a change initiative was a success, failure, or mixed result. It can also offer valuable insights and lessons that can be leveraged in future change efforts.

Ask yourself questions like: Were project goals met? If yes, can this success be replicated elsewhere? If not, what went wrong?

The Key to Successful Change for Managers

While no two change initiatives are the same, they typically follow a similar process. To effectively manage change, managers and business leaders must thoroughly understand the steps involved.

Some other tips for managing organizational change include asking yourself questions like:

• Do you understand the forces making change necessary? Without this understanding, it can be difficult to effectively address the underlying causes that have necessitated change, hampering your ability to succeed.
• Do you have a plan? Without a detailed plan and defined strategy, it can be difficult to usher a change initiative through to completion.
• How will you communicate? Successful change management requires effective communication with both your team members and key stakeholders. Designing a communication strategy that acknowledges this reality is critical.
• Have you identified potential roadblocks? While it’s impossible to predict everything that might potentially go wrong with a project, taking the time to anticipate potential barriers and devise mitigation strategies before you get started is generally a good idea.

How to Lead Change Management Successfully

If you’ve been asked to lead a change initiative within your organization, or you’d like to position yourself to oversee such projects in the future, it’s critical to begin laying the groundwork for success by developing the skills that can equip you to do the job.

Completing an online management or leadership course can be an effective way of developing those skills and inspire several other benefits . When evaluating your options for training, seek a program that aligns with your personal and professional goals; for example, one that emphasizes organizational change.

Do you want to become a more effective leader and manager? Explore Management Essentials , Leadership Principles , Organizational Leadership , and Leading Change and Organizational Renewal —four of our online leadership and management courses —to learn how you can take charge of your professional development and accelerate your career. Not sure which course is the right fit? Download our free flowchart .

This post was updated on August 8, 2023. It was originally published on March 19, 2020.

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Updating Your Business Plan Our coach explains why constantly updating your business plan is the key to growing successfully.

By Tim Berry Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

"When should I update my business plan?" The answer to that question is always . You should be updating your business plan every month, every week and every day; whenever things change, you update your plan. And things always change. You should update your business plan when you're alone in the shower, when you're caught in traffic on the way to work, and when you're walking alone. Update your business plan when listening to customers and other managers.

While this might seem like chaos, it's actually the opposite; the constantly-updated business plan is what makes order out of chaos. It becomes a long-term planning process that sets up your strategy, objectives and the steps you need to take by constantly being aware of the results of these steps.

Managing the Planning Process

The annual update.

Update your plan thoroughly at least once a year. You can start with an old plan and revise, but make sure you're taking a fresh look--distance yourself from the trees and look at the forest.

• Talk to your customers and potential customers. Review your value proposition. What are your customers buying? What problems do you solve? What other solutions can they choose?
• Try to come up with a new market segmentation. Segmentation is the grouping or divisions you see in the market. For example, if you normally view your market by type of product, look at it by channel or buyer. If you divide by region, divide by size of buyer company. Think up a new segmentation to give you a fresh view.
• Look at the larger potential market for the problems that need solutions. Look at contiguous businesses. Look at changing trends and technologies.

The Monthly Update

Accounting and financial analysis normally works in months since the books close after every month. Make sure you have a monthly review of the difference between planned results and actual results for your sales, profits, balance and cash.

• For each of the standard pro-forma projections, always maintain a table with the plan, another with actual results, and a third with the difference between plan and actual, which is called variance.
• As an annual plan marches through the months, you can use the table reserved for actual results to include changes in budget that affect the near future. For example, if the annual plan starts in January, then by the end of May you have an actual Sales Forecast that includes actual results for January through May and the latest revised forecast for June through December.
• You must also review the activities, deadlines and planned results that don't fall into the financials. A good plan is full of milestones, assumptions and tasks, all of which should be measurable. Make sure you review and update these measured results every month.

Managing the Major Revisions

The business planning process involves an important paradox. Strategy works only when consistently applied over a long period, which means that you can't implement strategy without following a long-term plan. However, blindly following a long-term plan can also kill a company that stubbornly insists on following a plan that isn't working.

Resolution of the paradox is called management . It involves judgment. The owners, operators and managers of the business have the responsibility of distinguishing between consistently applying long-term strategy and blindly following a failing plan. There are no easy rules for this, but the first place to look for clues is in false assumptions. Has the real world proven wrong the assumptions on which your strategy is based? This kind of subjective judgment is what makes business management so important. The planning process, with its regular review, is critical.

Every Business Plan is Wrong

You have to realize your business plan is wrong. All business plans are wrong. Plans are about the future--and nobody gets the future right very often, so keep the plan fresh and watch closely as reality moves forward. A planning process constantly watches the difference between the plan and actual results. Reality swallows our assumptions and we need to keep track of where, why and how we were wrong. This kind of tracking becomes the key to management.

A Good Business Plan is Never Done

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