For newbie entrepreneurs, the very thought of coming up with a business plan is headache enough to reconsider whether going the entrepreneurship way is really worth it. The time, money and expertise that a good business plan needs are usually to demanding from business owners. However, for any entrepreneur who actually wants to be a success, having a business plan is very essential. As such, many entrepreneurs have no choice than to come up with one. While doing this though, here are 4 mistakes you should avoid.
- An incomplete plan: As mentioned earlier, the resources that go into the development of a business plan are sometimes high for a startup. As such, the temptation to wrap up without touching some important issues are there. For example, after a thorough discussion of the industry, particularly industry trends, such as if the market is growing or shrinking, you might be tempted to gloss over the financial aspects such as revenue prediction.
- A vague plan: A plan must be understandable to the reader. It must be well written, logically arranged and follow a thought pattern that is obvious. An incoherent plan is highly likely to turn off any reader, and an entrepreneur does not want that if he’s interested on selling eventually. If you’re trying to keep the information vague because your business involves highly confidential material, processes or technologies, then show people your executive summary first. Which should adhere by the above rules.
- A too-detailed plan: At the other end of the scale are business plans that are too detailed in nature. Never heard of that? Well, they do exist. This is especially rife among the IT and manufacturing sectors where technical details are important. It is important to remember, however, that some of those interested in this plan may not specialists in your field. Too many technical details will serve no other purpose than to bore them and reduce the appeal of your plan. And if technical details must be spelt out, keep them to a barest minimum or just add them as an appendix.
- Unfounded and unrealistic projections: The very purpose of a business plan is to project a path and results that should be obtained by following that path. Since it is a futuristic thing, assumptions and risks are involved. Every business person knows this. However, there are different kinds of assumptions- some based on certified business practices, others based on mere intuition. The best thing to do is use industry standards or another generally acceptable standard. Use forecasting methods that are acceptable in your industry. In addition, some plans have no clear line demarcating the known facts from assumptions. Rather, they muddle everything up. Instead of this, you can have a sub-section dedicated to Assumptions