5 Common Mistakes When Writing a Business Plan5:25 AM
Writing a plan of activities is essential for achieving business success. I saw many ventures sink down due to lack of planning. So before y...
Writing a plan of activities is essential for achieving business success. I saw many ventures sink down due to lack of planning. So before you have your written actions, take a look at what is the most difficult part of writing a business plan and how can you overcome it?
What are the most common mistakes we make when writing a business plan?
There are many mistakes made by young entrepreneurs when writing a business plan or when they do not understand why potential investors reject their ideas.
5 Mistakes in Writing a Business Plan
1. Ignore the competitionA business does not work in a vacuum. There are direct and indirect competitors who will fight hard to maintain their current customer base and market share.
Often, the entrepreneurial team declares that their products or services are so impressive that they have no competition.
This statement tells investors that the management team is over-reliant and can not anticipate external factors that can impact the business.
There is also the possibility that it is true that there is no competition because there is, at least at that moment, no market for that product or service.
2. Unrealistic financial projectionsWhat investors want to see is a growing company, but what they also want to see are realistic and attainable financial projections.
Financial data inconsistent with the usual rules in that business or very aggressive can quickly file your project. It's best to be conservative and work with our professional accountant to show winning but realistic numbers.
3. Millions of consumersPretending that your Market is immense and that anyone is a potential customer of yours will quickly lose all credibility in your business plan. It is possible that in the future you can undertake different market segments, but for now it is better to focus on one or two niches that you can actually attend
4. DilationMany entrepreneurs underestimate the time and effort required to build a successful business plan. Do not be late. If you're going to need capital in six months, now is the time to set up a plan and put the money together.
5. The big businessA company may have signed an agreement with a large corporation, but the overemphasis on that agreement may be perceived as weakness. If 80% of your income comes from a contract, your business can be appalling if the deal is broken.
It emphasizes that your company is prone to forge strategic alliances and/or to win important contracts and that you will use this ability to diversify your client base.