The business plan is a live document that serves to help you to run your business towards your business goal achievement. It is not something to stay in the drawer and take dust on it. It is not something that you need to set and forget. You must remember that the business world is a world that is constantly changing. Because of that, you need to measure business plan implementation results and adjust your plan from time to time.
Entrepreneurs are people that are always full of business ideas. The ideas are something that pushes forward all businesses. You, as an entrepreneur, maybe don’t have those ideas in a time when you have prepared your business plan. If you know that those ideas will increase your business success, you need to cover those business ideas into your business plan.
You can’t expect that your business plan will be a 100% accurate because it is based on historical data, analysis, and forecasts for the future. Mistakes will be something normal and that is reasonable. But, mistakes, because you are not measuring the implementation of your business plan, are not reasonable and can bring catastrophic effects on your business. Because of that, you must compare what you have planned and the real numbers. Also, you must find the differences and causes of those differences.
In such a way, you can implement changes on the go as you start implementing your business plan and will improve your planning process. So, you will learn to implement many improvements in the next planning cycles.
If you succeed in implementing the pieces of advice I will give you here, you will not only implement improvements of the current and next planning processes, but also the improvement in your whole business processes.
Elements You Need to Analyze and Compare When You Measure Business Plan Implementation Results
What are those most important elements that you need to analyze and compare when you measure business plan implementation results?
Here, I will cover some basic points of comparison that you need to use when you measure business plan implementation results:
1. Your Business Goals Achievement Results
Your business plan starts with your business goals. You must ask yourself and give answers to several questions. Have I accomplished the business goals that I set for the previous year? Will my current work enable achieving those goals?
This is important because if your goals are not achieved, you must change something in your current work. So, if this is the case, you will need to discover what is the best things you need to do in order to achieve the goals.
Sometimes, you may find that you are not in the situation to do something more. In such a case, the best possible thing you can do is to change your goals to become more achievable. Use SMART goals when you try to change goals in your business plan.
2. Your Products/services
Do you have introduced new products or services that you don’t have listed in your business plan? What are the results from comparing your products or services with those of your competitors? Do you have plans to introduce new products or services that you don’t have noted in your business plan? The products or services part of your business plan is one of the most important elements of your plan. You must continually follow them.
3. The Market Where You Compete
Are there the same trends on the market as you have predicted in your business plan? Most of your business decisions will rely on the market conditions. You must follow your market if you want to stay there because if you don’t follow the changes in the market, the market will reject you.
4. The Industry of Your Business.
Are there crucial changes in your industry that was not predicted in your business plan?
Every industry has particular characteristics. For example, IT industry has characteristic of quick and big changes in the shorter time period. If you want to stay in the trend of your industry you must observe all changes in your industry.
5. Your Marketing Strategy
Is there some change in your marketing strategy that is not covered by your plan? How are you setting up your prices, promotions, and distributions?
All of these elements are categories that can change over time. These elements have an influence on your sales, current processes, and management. Because of that, you must include these changes in your business plan.
6. Your Sales Achievements
Are your sales numbers same as you predicted in your business plan?
Your current sales numbers will impact your profitability, cash flow, type of marketing activities, employment, etc. This is an important element and your business rely on it. So, you need to measure and make proper changes according to the results of the measurement.
7. Your Marketing Plan
Do you implement some marketing changes that will require some changes in your marketing plan? If you have such changes, update them into your business plan.
8. Your Organizational Structure
Is your organizational structure the same as you have noted in your plan. Is management team the same or not? What’s going on with the employment plans?
These are important questions you should ask yourself as a part of the measurement process of implementation of your business plan.
Is your profit/loss statement same as you have planned to be in your current business plan?
This is an important question for you because it will show are you moving in the right direction when it comes to your profitability. Knowing this you will be able to quickly solve many problems related to your profitability.
10. Your Cash Flow
Is your cash flow as you have planned to be?
Are your strengths, weakness, opportunities, and threats the same as you note in your plan? Is there the change in their influence on your business?
The Process You Need to Use When You Measure Business Plan Implementation Results
These are the basic activities that you must do in the process of measurement:
- Find causes for the differences
- Solve all problems through eliminating negative differences.
In the following picture is a flowchart for the activities you must perform when you measure business plan implementation results and compare different current business plan elements with planned.