If there is only one thing you need to get right when you start a new company, it’s your business plan. A good business plan outlines the whats, whys, wheres, and how much that you, and potential investors to your company, will need to know. Even some of the greatest product or service ideas of all time will struggle if they aren’t supported by a robust, accurate, and inspiring business plan.
With this in mind, I thought I would go through some of the deadly sins of business plan writing. What are they, why do they happen, and how can you prevent them? Read on to find out more – and ace your next business plan the first time! Let’s take a closer look at everything you need to know.
Writing it all at once
There are many parts of a business plan, and they all make up an overall picture of your proposal. But you don’t need to sit down and write it all, in order, in one go. In fact, doing so should be avoided at all costs. You will start off with the best of intentions, but by the time you are finished, your boredom will be self-evident to anyone reading. So, just write your business plan over time, doing it in chunks – it’s the best way to start things off, and an easier way to get things finished.
Thinking you’re the bee’s knees
Your idea might be a great one. But you have to realise that everyone else has great ideas all the time, too. And, that a business plan isn’t about your idea anyway – it’s about the business potential of your idea. If you create an all-guns-blazing plan of activities and declare you will earn a billion before the year is out, you will be laughed out of town. You need to prove you can build a business on your idea, with hard facts, reasonable estimations, and realistic measurements of achievement.
If you are using figures, make sure they are correct. If you need help, find a financial expert to give you a hand. Similarly, a fresh pair of eyes going over the copy in your business plan can’t be a bad thing. You can pass it over to a business plan specialist, or even use a proof reading service, who might be able to help you make your message clearer and more succinct. It would be a genuine shame for a business plan to be thrown in the bin on account of a few glaring spelling mistakes, but it shows a lack of focus and a poor eye for detail.
Setting it in stone
A good business plan is never finished. What you show investors or stakeholders is a ‘most recent’ version, and it will be obvious to everyone if you are using the same plan you have been hawking for the last five years. Make changes, keep figures updated, and keep it alive – it should adapt as your business goals change.
Too much/too little detail in your figures
As I mentioned above, you need to update your business plan at all times and include all your business milestones such as your cash flow, deadlines reached, and sales. If you blur over these relevant facts, potential stakeholders will see it straight away and suspect you are trying to hide some gory details. On the other hand, you can take things too far when it comes to projecting forecasts beyond the next twelve months. Don’t forget, this is a business plan – not your business accounts. If you start suggesting you are on course for a record-breaking five years, it’s not going to look good for you.
No understanding of the market
The market available to you will dictate how successful you are. If your business plan is full of assumptions about your ideal customers, such as who they are, why they will buy your product, and how much money they will spend, people will see through it straight away. It’s vital to research your market thoroughly and ensure you understand the realities involved in getting your business out there. And you should also have the foresight to include any vulnerabilities with your plan seeing potential problems might scare off some investors, but it will also show others that you are serious about what you are doing.
Because you need a plan
Finally, a business plan should never exist for the sake of it. Sure, it’s common sense to create one, but you will only get out of it what you put in. And it should always have a meaning beyond seeking investment – it needs to be shared with your team to organise your goals and measure your achievements. So, put the work into your business plan – you won’t regret it.