All entrepreneurs and business owners plan to grow their companies. However, in order to make that growth happen, you’ll need to create an actual business plan.
There are numerous benefits to creating a business plan; perhaps the most important reason is the fact that no lender will take you seriously if you don’t have one. In addition to helping you acquire funding, a great business plan can serve as a best practices guide for you and your staff while helping you identify milestones and stay on track. It can also be a resource for planning and managing cash flow.
We’ve already covered what you need to do in order to create a good business plan. But, just as important, you need to know what not to do as well. Here are five common business plan mistakes to avoid:
It can be tempting to put off creating a business plan until you need one. Unfortunately, at that point it may already be too late — even if your business is already up and running, you will still need a business plan to approach lenders when it’s time to grow the business, or to be prepared in case you need to train new hires.
We understand that most business owners and aspiring entrepreneurs are extremely busy, but it is imperative to carve out some time to put together your plan. Don’t procrastinate; make creating your business plan a priority.
A Lack Of Polish And Professionalism
Your business plan is a reflection of you; if it is a sloppy, unsightly mess well, that may be what the people who read it think of you.
Take the time to proofread everything you write, and make sure that there are no missing page numbers, headings, charts and graphs. Maintain high standards of quality and professionalism; if you wouldn’t accept the document from an employee, don’t think a bank will accept it from you.
There are some free business plan tools that can make creating a professional business plan as simple and straightforward as possible.
You should have confidence in your new venture; however, there’s no such thing as a sure thing — and lenders know it. Don’t guarantee growth or success in the plan or intimate that there is no risk of failure involved. Instead, acknowledge any potential risks and proactively detail how you plan to overcome them.
Not Doing Your Homework
A winning business plan not only includes detailed information about the business itself, but its customers and competition as well.
Your business plan should provide a detailed overview of your market, the players who are currently operating in it and your potential customer base, so you’ll need to conduct research.
Being Too Vague
A business plan should offer enough information for an investor to make a decision or for a business partner to grow the company. Without sufficient detail, the document doesn’t carry much worth.
Write the plan as if you were talking to someone who knows nothing about your business or industry. Explain key points as thoroughly as possible and avoid speaking in jargon. Make sure any charts or graphs are clearly labeled so that they are easily understood.
What’s Your Plan?
A business plan is essential to advancing your business. But when it comes to advancing your career, you’ll need a plan as well. Download our free e-book, Living The Dream: How To Transition From The Workforce To Your Own, for a step-by-step guide that can help you go from frustrated employee to successful franchise operator.