There are many mistakes aspiring entrepreneurs can make when compiling a business plan. Firstly, one must consider the role of a business plan:
“It serves as a window through which the entrepreneur allows interested parties a bird’s eye view of the prospective business”.
The plan must therefore be an accurate and comprehensive reflection of the business – in fact, it must act as a blueprint of the operational mechanics of a business.
Common Business Plan Mistakes
With this in mind, these are some of the common mistakes made with business plans:
- A poorly researched plan. A vague business concept, or idea on paper is often not workable in practice if too little time and energy is spent on doing your homework.
- Long-winded and boring. A plan should portray the energy, insight and excitement of the entrepreneur.
- Limited financial forecasts. This may show a lack of, or limited understanding of the intended venture.
- Unprofessional presentation. This would translate into paying no attention to detail which is necessary in business. For presentation purposes, you may need to employ a professional graphic designer to assist in designing your presentation.
- Too little time is spent on the promotional aspects for the business. In other words, the entrepreneur has no or little idea how he or she is going to advertise/promote or market his/her products and services in order to get the feet through the doors. The plan merely reflects what others have done in the past with no imagination for advertising the business’s products or service. In other words, the advertising/marketing plan has nothing new to offer with no “thinking out of the box”.
- Limited marketing intelligence and market research. How can you expect to capture a particular market if you have no idea of what your competitors are doing? What separates your business from the next? What are the differentiating factors that gives you a competitive edge? What are the current market trends, consumer behaviours, industry composition, statistics, etc.?
- Poor profiling of products and/or services. Your in-depth knowledge of your products and/or service should jump off the pages in your business plan.
- Disregard for your business plan. It should be a dynamic working document and a guideline to managing your business that should be revisited and updated on a regular basis.
Get investors to take you seriously. If you want stakeholders or potential investors to take your business seriously then your business plan should:
- Be well researched and professionally presented.
- Be concise.
- Profile your business in a fresh and novel way – doing things differently will have different results – guaranteed.
- Include enough research on financial forecasts and “the market” that demonstrates the seriousness of your intent and that you are familiar with the finer aspects of financial management.
The main question entrepreneurs need to ask themselves is:
“How must I package and present my business plan so that it will make the right impression on potential investors and key stakeholders”?