A business plan is one of the first major things you should create as an entrepreneur; it distinguishes business owners with an interesting idea from those who have a real structure in place. A good business plan attracts stakeholders such as investors and partners, and is the foundation that makes the first few years of your business operations possible.
The strength of your business plan plays a pivotal role in building a business. Therefore, if your business plan is poorly written, it could prevent you from getting the funding or attention you need. Despite this, many prospective entrepreneurs do not take their business plans seriously; some do not even bother to write one!
Writing a business plan is an indispensable step in laying the road map that your business will follow to secure funds, satisfy the needs of your target market, make sales, stand above your competition and achieve growth. To get the most out of your business plan, you must avoid these common mistakes.
1. Being unrealistic
Forget about what you heard, starting a business is not a walk in the park because it takes courage to venture into business. Do your research and be honest with yourself. Your business plan cannot be perfect; it just has to represent the realities of your potential customers, finance and other elements of your entrepreneurial space. Be honest with your financial projections and competition. Invest in market research to know if there are people that are even ready to buy what you’ll sell, and understand trends, consumer interests, and other aspects of product or service viability.
2. Grammatical Errors
Mistakes such as typos and grammatical errors should not take the shine off your brilliant business plan. Don’t distract your reader with sloppy mistakes. Use spell-check tools and proofread. Even if you’re a great writer, have someone else check your business plan over for things you might have missed. That way, you can ensure that your business plan does not have typos and that it is well-written.
3. Not considering business risks
Business and risks are inseparable but the latter can be well managed and can be instrumental to your success. In your business plan, you need to consider local and global trends. Risks are always lurking in form of changes in political policies, increasing competition, economic fluctuations, etc. All these and more could hamper the growth of your business and that is why it is important to put everything into consideration while writing your business plan and making projections.
4. Not understanding the totality of the business
This point cannot be overemphasized. As a prospective business owner, you must know your mission and vision; these are the things that indicate the direction of your venture. Your business plan must corroborate your vision and mission statements, they should align with your business overview, offerings, model, marketing strategy and operational strategy.
5. Not Knowing your Target Customers
Your target customers are at the center of your business; they are the ones that you are trying to capture. Your funding and networking would be useless if they are not going to benefit your target customers. When you understand who they are, their behaviours and pain points, you would know how to add value to their lives with your products or services. For you to achieve this and to prove to investors that you know your target market, it is advisable to include detailed and granular information in your business plan.
You cannot keep the definition of your target customers general. For example, saying that your app is for people who want to be able to manage their time during the week is great. However, different groups of people have different lifestyles so everyone might not be interested in the same time management technique. This is why it is better to state clearly the people that you want to impact; are they students, stay-at-home mums, and others? Without narrowing down your customers and defining their unique needs, the result will either leave investors confused, or your venture might be at risk of becoming overly complex as it tries to please everybody.
6. Detailed Description of the Product or Service
It is okay to describe your product or service but being too detailed could spoil the fun, especially with innovative technology or software products. If your description drifts into jargon and technical details that are not relevant for understanding the business impact, then you might be putting off the readers. Bear in mind that stakeholders, including investors, could come from various backgrounds so your business plan should be made easy for them to digest.
Now that you are aware of these mistakes, all you have to do is try to avoid them. It might not seem easy, but it will definitely pay off in the end. You can always return to Smartpreneur for further assistance and more tips.