10 Business Plan Mistakes To Avoid
You have a great business idea in mind. So do a hundred other people. But what can set your idea apart from them is a great business plan. Before going all out with any business idea, you have to face the reality that a lot of people do have feasible and unique ideas in their minds but most of them fail to present those through good business plans which can actually induce investors to invest.
It is actually extremely easy to go wrong when creating business plans. Some of the mistakes are very simple, yet very commonly made as well. Brandbucket has come up with a list of such terrible mistakes that you should avoid when making a plan for your business:
Business Plan Mistakes
1. Poorly written
No one wants to go on reading a plan with a number of spelling or grammatical errors in it. This is why to ensure that your readers do read the entire plan, you need to make sure your business plan has no spelling, punctuation or grammatical mistakes. When you present a plan with such mistakes in it, investors instantly get a negative impression about the entire idea and thus, move on to the next business plan presented to them. So recheck each and every line of your business plan before showing it to investors.
Would you want to read a magazine or newspaper with missing page numbers or inconsistent margins or charts and tables without headings? You wouldn’t, right? Same goes for your investors or bankers. If you put up a sloppy and unorganized business plan in front of them, they will just reject it based on the sloppy presentation of the plan alone. So make sure you have a business plan which is organized in every way.
Do not come up with an incomplete plan by any means. Make sure your business plan does have sections on target customers, products or services, operations, marketing and sales, management, competitors, industry, trends, growth rate and comprehensive financial estimations such as cash flow statements, income statements, and balance sheets and so on.
4. Too vague
Remind yourself continuously that it’s plan you’re writing, and not a story or novel which can be vague and mysterious. Make your plan both succinct and detailed. Write it in such a way that any high school graduate can understand it easily. However if you have a business idea which involves confidential elements that cannot be shared with every investor, then present the executive summary, which is devoid of proprietary information, to them first and then if they are interested, ask them to sign non-compete and nondisclosure agreements before handing them the complete plan.
5. Too detailed
While vagueness is not an option, the same goes for getting overwhelmed with a lot of details. It’s good to have a detailed business plan but not a plan crowded with too many technical details. Be careful of making this mistake especially when you’re writing a plan for technology-based business. Keep the additional technical details in the appendix; do not overcrowd the main plan.
Business plans of course cannot be based on all hard facts and numbers. Every plan does have assumptions in them. However, what’s important is to be able to separate the most critical assumptions from the rest and be able to present them in your business plan backed up by some rationalization or logic. It is very important to be able to link your assumptions to facts. That’s what separates a good business plan from a completely unrealistic one.
7. Inadequate research
How do you make sure that the facts you included in your business plan are accurate and up-to-date so that they can indeed back up your assumptions? It’s simple – by conducting adequate research. When you try to skip doing enough research for your plan, you end up with a plan that’s just based on your thoughts and feelings. Investors seek facts and logic, not individual opinion. So explore every dimension required by your plan via research before coming up with a good business plan.
8. No risk
Every business faces risk of some sort. If it doesn’t, it’s not really a business at all. This is why when writing a business plan, make sure to include one or few actual risks in it in order to make it more realistic. However don’t go overboard with it. Keep them to a minimum and make sure you also include how you plan on alleviating the risks.
9. No competition
Just like every business has risks, they have competition as well, both direct and indirect. If you think you have no competition, it is time for you to carry out adequate research and find out who your competitors are. Always make sure you plan for your competition from the very beginning by emphasizing on your competitive advantages.
10. No plan
A business plan is much more than just an ordinary plan. It is also short and long term overview of your business as well as a roadmap of it along with detailed descriptions of how you plan on moving from one step of the roadmap to the next. Because your business plan comes out as a reflection of your business on the paper, you have to make sure it is exactly how you want it to appear to others – detailed, errorless, organized, realistic, complete and convincing.
What other tips do you have for entrepreneurs on business plan writing? Share with us in the comments.
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