Any start-up business requires a business plan to prosper. The question, however, is whether or not the business plan will actually help the start-up succeed.
Business plan mistakes are common with entrepreneurs starting their first companies. They don’t think through the actual benefits of a business plan; instead, they simply write one because they know it is what they are supposed to do. Keep in mind that a business plan serves a valuable purpose.
The Business Plan Contains Grammatical Errors
An entrepreneur does not have to ask his high school English teacher to correct his business plan, but a start-up business should be run by a reasonably intelligent human being. Grammatical mistakes, such as spelling and punctuation errors, are red flags that the plan was written by someone who just didn’t care.
To avoid these types of business plan mistakes, it is important for start-up entrepreneurs to review it carefully for the tiniest of errors. The document should flow easily from one section to another and the copy should be free of mistakes. Don’t rely on the spell- and grammar-check capabilities of software applications, either; they won’t catch all the errors.
The Business Plan is Not Written with Investors in Mind
A business plan is intended for many purposes, not the least of which is securing financing from outside investors. When writing such a plan, entrepreneurs should step into the shoes of potential readers to see how they might perceive it. Does the business plan tell investors why they should put up their money for this enterprise? Is it persuasive enough? Does it answer the most important questions?
Play devil’s advocate to avoid business plan mistakes. It should lay out all of the reasons why this start-up might not work out, then strategically outline the ways in which the business owner will ensure those issues do not result in the failure of the business.
The Business Plan is Poorly Presented
A start-up business plan should be printed on high-quality paper and with a laser printer. This ensures the best presentation for the plan and will impress whoever reads it. A business owner might keep a copy that he ran off a standard ink jet printer on lightweight copy paper, but a more pristine copy should be reserved for presentation to investors and banks.
The Business Plan Makes Assumptions
There are two major assumptions inherent in most amateur business plans. The first is that investors, banks and other readers will understand the industry jargon used to explain the foundation of the enterprise; the second is that assertions will be taken at face value.
To avoid these business plan mistakes, it is imperative that start-up entrepreneurs explain everything in fine detail. Don’t assume that others will know what you are talking about; put it in plain English. And if you state assertions, such as statistics or eventualities, back them up with properly-cited data from reputable resources to enhance your business start-up.
The Business Plan Doesn’t Shine
What makes this startup business amazing? What about the business screams, “Success!” A business plan isn’t just intended to outline the specifics of a start-up; it is also meant to sell the business to investors, lenders and prospective employees. Why is this business special?
Think long and hard about what will make this business succeed beyond its competitors. It could be a specific brand of customer service, an ingenious product line or an attention-grabbing slogan. Make those specifics stand out above everything else.
The Business Plan is Not Realistic
Every business start-up has a downside. There is no perfect start-up. Many entrepreneurs make the mistake of avoiding the negative, afraid that bringing up potential obstacles will scare off investors. Nothing could be worse for a business plan. Instead, face the challenges head-on in clear, easy-to-read text, then describe what will be done to overcome them. A realistic business plan is actually better than a perfect one.
These business plan mistakes are fairly common, but they can be overcome when entrepreneurs are honest about their start-up businesses. It doesn’t take a rocket scientist to put together a slam-dunk business plan, but it does require hard work and effort.