5 Common Business Plan Mistakes That Ruin Startups
If you want to start a business, your first step will invariably be to draw a business plan. This is a major step as an entrepreneur, since this document is not only a blueprint of your operations, but also one that will attract investors and lenders to invest their money in your idea.
If you think business plan is applicable only for some types of businesses, you cannot be more wrong. You have all kinds of business plans, such as computer hardware manufacture business plan, clothing store business plan and even cattle farming business plan. In other words, it includes all kinds of businesses.
A business plan is an important document, since it has a bearing on your business. If poorly written or frivolous it can put off investors and prevent you from getting the funding and assistance you require. Thus, it needs to be taken seriously.
The key to writing a good business plan is to avoid mistakes that entrepreneurs commonly make. Let us see what they are:
#1 Not including all sections
A business plan is made up of major sections that are all important and expected by the mentors and investors. This includes a business summary page, a model for growth, financials, target audience, the need for your product and others. These parts are needed for convincing your investors why your business will succeed and have an edge over competitors. It also indicates your hiring plan and business growth pattern. If any of these critical sections is missing, your chances of getting financial support diminishes.
#2 Not carrying out adequate research
The investors or lenders will not put in money just for your business idea, which may be great. They are looking for industry stats and objective numbers that support your idea. If that is missing, you can easily forget getting any support. Therefore, it is important to undertake a thorough research of the business you want to start. This includes target demographics, competition, projected growth rates and other important statistics. The more the hard facts you include in your business plan, the more difficult it will become for anyone to ignore it.
#3 Not having clarity of thought
Your thinking is translated on paper while writing a business plan. If you have a clear-cut idea of how to go about achieving your business aim, it will get reflected in the plan. But, if your thinking is nebulous, the business plan will turn out to be vague and will act as a red flag for your investors. The trick is to solidify your business plan with precise and accurate information on all aspects of your business. Be as detailed as possible. This will help clarify your mind and also project a positive image to the investors.
#4 Not getting your business plan reviewed
Howsoever thorough and meticulous you may be in writing your business plan, if you don’t take the feedback from experienced businesspersons who have been there, done that, it is sure to have its shortcomings. By showing it around to knowledgeable people you will come to know whether your business plan is as comprehensive, well-researched and well written, as you had expected. You will also get ideas that you did not even consider and know about some significant problems that you are likely to face. Knowledgeable persons can be your business seniors, colleagues and even family and friends.
#5 Not making it interesting
A business plan, by virtue of its very name, conveys the idea that it will be a dull and boring read. This need not be so. It is up to you to make it interesting and exciting. You can include your own story that got you your business idea and the troubles you took in thinking it through. You can delve upon your future expansion. The document should convey your passion to realize your business idea to the reader. This will impress the investors and lenders to invest in it.
A business plan is the guide map of your business and has to be all inclusive and exhaustive, yet interesting. You will gain much in writing your business plan by steering clear of these mistakes.