Business plans are necessary for birthing a successful company or ensuring that an existing business doesn’t plateau. They can be a powerful tool for ensuring business growth, but they can also hamper a business if they are not properly executed.
As you craft a business plan, watch out for these common mistakes.
- Procrastination – Many businesses put off making their business plans until the bank or investors demand them. You might consider yourself too busy to sit down and make a formal plan, preferring to stay in the middle of the action instead. The bottom line, though, is that a business plan is critical for guiding your success as a company. And if you wait until the last minute to formulate your plan for investors, your failure to prepare in advance will likely come shining through. Savvy investors will be able to detect your rush job.
- Flimsy research – A business plan should be a well-researched piece of work. Whatever data you include in the plan must be accurate and factual. You cannot just present assumptions that are not backed up by solid research.
- The plan is either too specific or too ambiguous – A business plan should appeal to all audience members—from the untrained to the expert eye. If the information is vague, readers might suspect that you are trying to hide technical data. If it’s too specific and detailed, you might confuse readers. Address overhead, customer retention, and include a discussion of industry trends and financial projections. Stay away from technical jargon and minutia. If it is really necessary to include technical details, you can put them in the form of technical appendices that only those who are interested and knowledgeable on the subject will read. Anticipate problems that might come up and make sure to address all of them in your plan.
- Poor writing – Basic spelling and grammar might seem like small issues, but they can send a strong message about your company’s professionalism. Remember that investors may be reading your business plan in the future, and you will want it to reflect sophistication and credibility. Carefully check your grammar and spelling before finalizing your plan. If proofreading isn’t your strong point, have team members or a professional proofreader vet the document.
Make sure that your business plan is a collaborative effort. Get input and knowledge from multiple team members. A group effort may take a little longer, but it’s worth it for one of the most important documents your company will ever create.