10 Common Business Plan Mistakes10:01 PM
There are many elements that make a good business plan. It often takes time, patience and many revisions before you get it right. Unfortun...
There are many elements that make a good business plan. It often
takes time, patience and many revisions before you get it right.
Unfortunately when rushing to get your funding in place and launch your
business, your plan can get neglected. Below we have highlighted a few
of the very common mistakes made when writing a business plan:
1. Unrealistic Financial ProjectionsMost Canadians are familiar with the businesses on CBC’s Dragons’ Den who grossly overestimate the value of their company and are chastised and shot down by the dragons. Lenders and investors expect to be shown a realistic picture of where your business is now and where it hopes to be, therefore if the plan is overly optimistic with no explanation of the projections, it will ring warning bells and cause the plan to be rejected.
2. Not Defining the Target AudienceNo business will appeal to everyone. You must define your specific target market, present how you have made these assumptions and outline how you will specifically target this market.
Need help defining your target market and learning about primary and secondary market research? Small Business BC offers seminars on market research (hyperlink) and one-on-one consultations with an in-house market research expert.
3. Over-HypeYou may believe your business idea is the next big thing but you need to be able to back-up your claim. Over-hyping your business idea and littering your plan with superlatives like hottest and greatest does not substantiate your product or service. Wow them with you business idea, research and financial plan, not with the words you think they want to hear.
4. Bad ResearchAll research must be double checked and substantiated. By using incorrect or out of date information you will discredit your business idea and the remainder of the plan.
5. No Focus on your CompetitionEven if you think you have a ‘unique’ business idea and are sure that no other business like yours exists, check and double check. There is no such thing as no competition. Even if your business is one of kind, it comes down to the dollar; if your business didn’t exist, but the customers’ need still existed, where would they spend their money?
Equally if you highlight your competition too much the investor will worry that the business will not survive. Focus on your niche, what differentiates you from the competition, how you plan to compete in the marketplace and paint accurate picture of what the industry is like now and where you see it going in the future.