Business Plan

First, changes in technology impact most businesses. If a new method of doing something is created, the business environment can change very quickly. If your product or service depends on the old technology, your business prospects could be dramatically reduced. Be alert to new technologies that can either hinder or help you. Good examples are the changes from records to tapes, from tapes to cds, and from cds to downloadable music on personal players.

Next, consider your customers. If desires change because of some condition, customers could abandon you very quickly. While some customer attrition is normal, be watchful of trends. You don't want to be the last company making buggies and whips when the rest are making automobiles. This doesn't mean you need to be the first to adopt new technology, but stay informed and search out impacts both for the good and bad.

We now come to financial concerns. Similar to losing valued customers, slumping sales figures should be investigated too. It's possible that a temporary condition has caused it, but waiting too long to figure out why and searching for a remedy must be aggressively pursued. The reasons might be found in market conditions, competitors, or the environment. New ways to address the slump must be employed. Your business plans will need to be revised to cope with the changes.

Just like decreasing revenue, increasing costs are destructive. If established cost baselines or forecasts are different, research must be conducted to identify the reasons for the cost changes. Then, remedial steps must be taken to reduce them or make changes to reduce their impact. The investigation should include looking at ways to reduce costs in other areas to help decrease the impact of rising costs. If you are a manufacturing facility, operation efficiency and controlling manufacturing waste can have a large impact on costs too.

Along with decreasing sales, increasing costs, or losing customers growing too quickly can be just as destructive. Explosive growth has many perils to a healthy business. There are challenges in maintaining quality, employing and training employees, procuring raw materials, expanding manufacturing operations, and controlling operational costs. Also, it often appears that there are piles of cash coming in so waste and luxuries might accrue. It's a long, known fact that business fail because they succeeded beyond their wildest dreams and aren't able to accommodate the changing conditions successfully.

These five areas require a steady and consistent hand from management. Business plans must constantly be revised to address changing conditions. In a very stable environment, a plan may be stable for a long period, but in an explosive growth environment, the plan might require almost constant review. In any case, the financial and management controls should be monitored constantly to see if changes are occurring and whether they need to be addressed. Recognizing the need to change the governing Business Plan and altering procedures are the modern requirement of a healthy business. An astute management team can address the changing conditions to find new opportunities among the challenges. It is certainly easier to adapt to changing conditions than to have them catch us napping. The latter forcing emergency measures amid a small number of choices, which adds risk to the venture.