5 Top Business Plan Mistakes
Running a business requires you to become a jack-of-all-trades. You must be versed in sales, product development, customer service, database management, HR and in making or selling the service or product — all activities you probably didn’t originally set out to be in business for. That’s where the business plan comes in handy. It gives you a guide to work with to stay on course with original objectives. Preparing a well thought out business plan is extremely important. However, 4 out of 5 businesses often make mistakes when it comes to writing out their business plan – and unfortunately, this can mean the ultimate demise of the business. The following are five major mistakes people make when writing out a business plan.
1. Poorly Written
Many business plans are only half put together and poorly written. They have spelling, punctuation, grammar and style issues. These are important because the business plan presentation offers a first impression to other businesses, lenders or investors. Before showing your plan to any investor, business associate or banker, you want to review your plan with a fine-tooth comb. You want to look for grammar errors and catch any misspells within the plan. Preferably, you want someone with experience in elaborating a business plan to review every facet of the guide. Essentially, you want your style to be clean, crisp, authoritative and formal.
2. Too Complicated
Although you certainly aren’t writing a book or novel, you still need to detail the process so that everyone understands it. If an intelligent person with a high school education can’t understand your plan you need to simplify it.
Everyone is busy, and entrepreneurs are even busier. You have customers, services, products, sales to organize, but that doesn’t mean your business plan should be incomplete. It’s important that you cover every facet and area of your business. Your plan should discuss your industry, trends and future possibilities in the market. It should include detailed data and financial information such as monthly cash flow, income and annual balances.
4. Too Technical
This is a common mistake that technology based startups often make. You need to simplify the technical details. You may need to include them in an appendix, but you want to keep the essence of the business plan easy-to-understand for everyone.
5. Make Assumptions and Fail to Identify Them
Often a business owner will make assumptions in the business plan. The most obvious of these is stating that the business will succeed. Good business plans highlight assumptions and back up information when possible with facts.
You may have a great idea, but you need to carefully map out the steps to creating the business. You need to specify everything from the management team, the sales force, to the way you plan on operating; and how you plan on getting your customers. You must think of cash flow and the ways you can minimize your expenses and maximize revenue.