Are your plans for your small business working out the way you hoped?
You’re not alone: U.S. small businesses are feeling cautiously optimistic about the rest of 2013, a new survey from TD Bank reports.
The poll of over 500 small business owners finds that:
- Almost half (49 percent) are somewhat or very confident their businesses will be in better financial shape this year than they were in 2012. As for the rest of them – 25 percent are not confident of their businesses’ financial health and 25 percent are still unsure.
- Nearly half (47 percent) are either somewhat or very confident their sales will surpass 2012 revenues. About 20 percent believe sales will shrink this year and 31 percent are uncertain.
- When it comes to employment, the news is even better, with 91 percent planning to hire or keep staff levels the same. Just 9 percent say they’re going to downsize this year.
One surprising result of the TD Bank survey is the degree to which small business owners review and update their business plans. I’ve always advised business owners to do this on a regular basis. But for decades, most of the business owners I knew admitted they rarely took their plans out of the drawer.
That’s changing: TD Bank says a whopping 87 percent review their business plans annually or more often. To be specific, 36 percent review and update their business plans once a year, 30 percent do it once a quarter and 20 percent do so monthly.
Why are entrepreneurs reviewing their business plans so often?
There are likely many factors.
For one, online tools make it much easier to change a business plan than it used to be. It’s not like the old days where you had to haul out the word processor and print out new pages (yes, I’m dating myself). You can call up your plan, including financials, and with a few clicks make changes and see how different numbers play out.
For another, the state of business demands it. With the economy still struggling to fully recover, new business models taking shape all around us, and increasing competition from around the world, small businesses face more competition than ever. Turn your back for a few months (or let your business plan sit idle for that long) and someone could eat your lunch.
Finally, and I think this might be the main reason, our concept of business plans has become looser. Chance are, you’re not going to review a 100 page business plan every month. But you might review the highlights – a “back-of-the-napkin” document that highlights your key areas of focus and strategies.
As long as this streamlined plan is backed up by thorough thinking, metrics and reality – that could be all you need.
Whatever you do, don’t be like the 13 percent of small business owners who only review their plans when they’re applying for new financing. That’s a backwards approach. If you review your plan regularly, you’ll know when new financing will be needed long before it’s urgent. You’ll be able to plan for exactly how you’ll use it and you’ll stand a far better chance of getting it.
How often do you review your business plan?
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