8 Business Plan Mistakes to Avoid
It is hard to get a funding from a business plan, already a very good business plan. You can give yourself a much better chance of raising capital if you avoid eight shared business plan mistakes.
Your business plan may be the first thing investors see, and it is important that your business plan be written professionally and excellently. Investors see thousands of business plans each year, and the ones that get funded are less than 1%. You will greatly enhance your chance of getting funded if you avoid these mistakes.
1. Mistakes in Overall Content
A well written business plan finds the solutions to problems that customers are looking for and will pay money to solve. The plan dos not need superlatives to say that it is great. If it is great, the readers will come to that conclusion. Also, be sure your plan presents a focused strategy to solve only one problem in the target market.
2. Stating “There is no competition”
Every business has competition, either direct or indirect. A competitor is everybody else that is trying to sell to the same target market. Your plan should show how you differentiate yourself from competitors and show that you are stronger in the market.
3. Too Long and Technical
Your plan must convey your business idea concisely. Any detail that you believe is important can be included in an addendum. Also, your plan should not be too technical or scientific. Keep it simple.
4. Poor Organization
There is a logical way that business plans should be put together, and each section should logically flow into the next section. You can finds hundreds of resources that tell you what the basic sections of a business plan should be, and you or any specialized you hire should follow this advice.
5. Incomplete or Inaccurate Financial Statements
You must use the right terminology in describing the financial condition of your business. The financials should contain enough detail to fully sustain your important assumptions.
6. Unreasonable Financial Projections
All the numbers in your financial projections should be reasonable and similar to financial projections of other companies in your industry. Your financials must include Income Statements, Balance Sheets, and Cash Flow Statement, and they all must be prepared in compliance with GAAP.
7. Writing Errors
You must use proper spelling and grammar and cannot be redundant. Be sure your plan is attractive, interesting, easy to read, and specialized looking.
8. Timing Mistakes
Have your plan in final form long before your presentation to investors. You may not have the 500+ hours required to write a business plan. Then you must hire a business consultant to write your plan. Be sure to have another objective person read the plan thoroughly and give you some feedback on its effectiveness before you show it to investors.