A business plan is a critical tool to carve out a roadmap for launching and running businesses. Reviewing the business plan and updating it regularly gives Management a chance to monitor progress and take corrective action if things aren't going to plan.
A business plan should be continually monitored to make sure that the business objectives are achieve. This mainly encompasses:
- assessing progress to date
- analyzing the most promising ways to further develop the business
The process of reviewing and analysing your business plan is called the business plan cycle. Depending on the type of business, this process can typically be:
- continuous - with the plan regularly updated and monitored
- annual - with the plan broken down into four quarterly operating plans
Sales driven businesses sometimes use a monthly operating plan, and weekly targets and reviews if needed.
Especially in the context of a (potential) acquisition, reviewing the business plan of the target is a crucial element of the wider commercial due diligence.