Business plans are key when it comes to putting a company together. They can help organizations review items like value propositions and marketing strategies, as well as operations, financial and staffing plans.
However, developing a strong business plan takes time, and it is likely that your organization will have to create several drafts before landing on a successful version. To aid in your drafting, avoid the following common business plan mistakes:
- Grammatical errors. Spelling, punctuation and other errors can destroy any credibility you have in an instant. Prior to sharing your business plan with investors or bankers, it’s crucial that you have an editor take several passes at it.
- Unrealistic projections. If your plan is too optimistic—or even dishonest—in terms of current and future value, it is likely that bankers and other investors will pass on your business. Do careful research when drafting the financial projection portion of your business plan. This will not only look good to those who read your plan, but it will also help you properly prepare for the future.
- Unclear target audiences. Businesses will appeal to different customers and markets to varying degrees depending on the company’s value proposition. Inaccurately or vaguely defining these audiences and markets can spell disaster, as you will not know how to successfully connect with customers and prospects. To avoid this, use primary and secondary market research to understand your business climate and where you fit in.
- Vague or complicated details. Your business plan should be thorough and contain enough detail that a person with a high school degree can understand it. At the same, your plan shouldn’t be overly focused on the details, and you should avoid sharing any proprietary information. A commonly expected business plan structure includes a three-page summary, a 10- to 20-page plan and an appendix.
- Poor competition assessments. Regardless of the industry, all businesses have some form of competition. A good business plan should identify your competition and their value propositions. Understanding and planning for this competition can help you better position yourself in your respective marketplace.
Remember that good business planning can help save you time in the long run. It may take more hard work up front, but thinking critically about your business, researching your competitors and getting feedback along the way will set you up for long-term success.
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