A proper business plan is the foundation of tomorrow’s successful start-up. Because start-ups are gearing up quicker than ever before, the competition is growing tougher. Common mistakes like lack of strategy, purpose, numbers, and pitfalls can lead to serious issues. Some put forth unrealistic goals that make things worse. In this article, we learn to identify them and learn from them.
Some key issues that revolve around making mistakes when writing a business plan come from not putting enough thought into the process itself. For example, business plans that are made to impress people rather than be actually practical are a big mistake. Then, lacking any proper survey of competition and ignoring personal stakes is also a very common pitfall.
Below are 7 such mistakes generally seen when making such plans.
- Assumptions without proper reasoning.
- Overlooking pitfalls and challenges.
- Lacking clear sense of purpose.
- Lacking a clear strategy to realize the plan.
- Using rough drafts and pre-drafts for presentations.
- Setting unrealistic goals for the time and market.
- Not including personal motivation and stakes in the project.
By just looking at the one-liners above you can understand the big mistakes people tend to make when creating their business plan. Investors and bankers will be glad to support a cause that can reap the profits, but they are also going to compare your plan with others. These days start-up pitching and ideas are going on in huge numbers, and banks and investors have a long line of competitive businesses that want their money. So, making these common mistakes can lead to very bad outcomes.
7 Secrets to Successful Business Plan
There is actually nothing that is a secret in a literal sense because these are things that people tend to ignore or miss.
Unrealistic Financial Projections and Goals
Lead to a sense of distrust and speculations among the investors. If they sense that the plan is overly optimistic, they wouldn’t like to risk their money. There are several such examples during any global start-up idea challenge and its hard luck. But, one can always see this coming and should improve, if required, to avoid rejection.
Target Audience and Market Research
Challenges in the current state-of-the-art are also a problem because people, not all products are for everyone. The start of any business plan is from its proposed customer base or audience. Thus, market research and one-to-one consultations are very important in this regard.
Over-Hype or Bad Research
The other end of the same phenomenon is doing your research, but not being sincere about it, and over-hyping the current scenario. In some cases, they may pass as viable candidates to achieve funding, during the displaying stage, things will come to light soon. This means one has to prepare for a shutdown or reinvent things on the go.
Do Not Hide Your Pitfalls and Weaknesses
Investors also want to know the shortcomings of an idea. No idea or team is without any issues, and this makes things difficult when there are 500 teams in a competition. Using optimism is good, but investors will invest in practical and realistic plans. So, when a plan identifies its weaknesses and writes about the ways to address them, it adds more value. This is a big thing for service-oriented projects.
Focus and Strategy should be Clear
Focus and strategy yield big benefits. Yes, even if you have a unique business idea, you should focus on the competition, strategy to expand and realize the goals. It ultimately comes down to the costs and creating a need for customers to spend money. You need to have a clear picture of how to compete in the marketplace, and how the industry will work. Focusing on your business idea is one of the strategies being followed by a successful entrepreneur, Deep Patel.
Make Use of Drafts
It helps iron out mistakes during the planning phase. Preparing a business plan is essential for good execution, and pitching to the investors. Prepare early drafts to perform dry runs as well.
Do Not Take Blind Assumptions
This can have serious issues. So, make a proper argument for assumptions of the audience, age, or market structure, or predicting future forecasts. Such assumptions based on economic and political interests also come into play. Since not all factors are available during the preparation of the business plan, expected values, and estimates are key to form concluding statements.
To conclude, there are several things that can go wrong in a business plan, but if they are among the above 7, these are silly mistakes. You can avoid them by looking at previous cases, and double-checking your sections. The content goes into it, the structure, the inclusiveness of all realistic goals, and being optimistic. There is no secret to a successful business plan, except for enough motivation to be sincere.