The History of Your Business Plan
The next “plan” is most definitely not a part of a formal business plan. However, I consider it to be one of the most important parts of every working business plan. This section, quite simply, is the history of your business plan. (Notice that it’s not the history of your business, it’s the history of your business plan.)
(However, "the history of your business plan" sounds needlessly formal, so I'll just refer to it as your "update log". As you'll see, your Update "Log" is about as informal as you can get.)
By this time, you should realize that all of the components of your business plan are dynamic documents. Consequently, you should review and update each part of your business plan on a regular basis, changing them as your business changes.
Here’s where the Update Log comes in. Whenever you make a significant change to your business plan (or any component of your plan), you should record this change in this section. Simply list the date that you’re making a change to your business plan, what the change is, and (this is really important!) the reason for the change.
It sounds like a lot of work, but it really isn’t. Since you’re undoubtedly developing your business plan on your computer, it’s an easy matter to copy your original material to this log before you make the changes. Just add a couple of sentences explaining why you’re making the change, and you’re done!
Why record your changes? If you update your business plan without noting when you did it or what changes you made, you’re losing valuable information. Analyzing the changes you’ve made to your business plan over time can tell you some extremely valuable things about your business.
For instance, excessive changes to your plan can indicate a lack of direction or commitment, or possibly inadequate planning. You’re not planning, you’re thrashing. But you may not realize this if you don’t have a record of the number of times you’ve changed your mind.
On the other hand, too few changes can indicate excessive stubbornness or a lack of imagination and creativity. The industry is changing, and your business — and your business plan — need to change with it.
Or maybe you consistently underestimate the time that a particular activity requires. You can learn from your past mistakes — but only if you have a written record of what those mistakes were!
There is no ‘correct’ amount of changes that you should be making. But over time, you should be able to examine this section of your business plan and gauge the accuracy of your estimates, and your flexibility vs. your purpose and commitment in your decision-making process.