December 22, 2010 | Comments | Uncategorized

I often talk to business owners about the need to constantly update strategic plans, financial models, and business plans. These are all “living documents” and need periodic updates.

Here are some guidelines:

  • Action Items: Daily (typically every morning or every evening)
  • Goals: Weekly, Monthly, Quarterly, and Annually
  • Strategic Plans: Quarterly and Annually
  • Business Plans: Quarterly
  • Investor Offering Documents: Quarterly (with changes in the business plan) and otherwise as required.

Here’s a key point: documents you hand to potential investors have to accurately reflect the status of your company. If something great happens, such as landing a big contract or having a person of great credibility join the team, most business owners are delighted to update the plans.

But when a setback occurs, such as having someone leave the team, inventory being lost, or a partnership falling through, many owners hesitate to update the business plan and other investor documents, and that is a mistake. You are legally required to present an accurate picture of the company – otherwise you are committing securities fraud.

If you have any question as to whether a change is “material” (meaning significant), please ask your securities attorney.

You have one, right?

Questions: When was the last time you updated your business plan and offering documents? Are they still accurately depicting the investment opportunity?

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