Whether you’re looking to secure financing or mapping out your road to success, a Business Plan is an essential asset when it comes to creating a solid foundation for your business. Here’s five embarrassing faux pas to avoid when writing your business plan!
1) Failing to Identify Your Weaknesses
You know why you think your business can blow the competitors out of the water. It’s time to consider what your competitors may have over you. Easily overlooked by entrepreneurs, the ability to step back and identify weaknesses allows you to see where your business stands. Learn how to leverage your strengths to account for your weaker points, adapt and use the information to grow your business. Having a tough time identifying your weakness? Consider the following: experience, staffing, location, and funding.
2) Financial Assumptions
Optimism- a positive trait needed by every entrepreneur. Being overly and unbelievably optimistic can turn the tables on the credibility of your business quickly! Identify where your business is right now. Where does your business plan to go in the next month, six months, one year, etc. Provide supporting forecasts that champion your projections. These can include verified marketing strategies, financial aid, partnerships, and sales. Refrain from overinflating your numbers by not considering crucial factors such as your initial costs, contingencies, and salaries.
3) Target Market Exaggeration
A common mistake and a dead giveaway that the business doesn’t know it’s ideal target customer. Let’s aid this conversation with an example- A new Specialty Cheesecake Bakery identifies their target audience as- People looking to enjoy a delicious dessert. Yikes! This is one mistake you should and need to avoid when writing your business plan. Yes, your product or service is fantastic; you have no doubt anyone that comes your way will walk away happy. The truth of the matter is not everyone is your target audience. For whatever reason, be it location, age, brand loyalty, language barriers, etc., without knowing your market, your audience, and the needs of your target audience, your business plan flatlines before it even gets the opportunity to get in motion. Here’s an example of writing a better, more defined target audience – Catering to those in the (location) area that enjoy moderately priced, specialty Italian cheesecakes by the slice or whole to go. Here you’ve defined the price range, area that the ideal customer would be looking for takeout rather than dine-in and the specific type of product. Identifying your target audience now narrows down your market from people like dessert to people looking for moderately priced specialty Italian cheesecake. Significant difference!
4) Lack of Supporting Documents
Most businesses are fueled by hopes, dreams, and desires. That’s all good and well but be sure to bring the documents and the realism along with your business plan. Financial institutions and investors are all going to want to see and know how you developed your business projections, milestones, and growth expectations. Supporting documents can include past sales records, market statistics, market research, inflation data, and development costs. Any actual, credible, and relevant documents can add viability to your business plan.
5) Information Overload
Keep in mind a remarkably simple concept- What do you plan to do? How do you plan to do it? Business plans have identified pillars; every part reverts to the two questions above. Refrain from overloading your business plan with too many technical or irrelevant details that take away from a strong, concise, and clear business plan.
Avoid these simple yet highly embarrassing business plan faux pas, and your business plan will reflect being put together by a realistic well-informed business owner. Good luck!