8 Business Plan Mistakes You Should Avoid
It’s hard to get funding for a business plan, even a very good business plan. You can have a much better chance of raising capital by avoiding eight common business plan mistakes.
Your business plan may be the first thing investors see, and it’s important that your business plan is professionally and excellently written. Investors see thousands of business plans each year, and those that get funded are less than 1%. You will greatly improve your chances of getting funds if you avoid these mistakes.
1. Errors in the general content
A well written business plan finds the solutions to the problems that customers are looking for and will pay money to solve them. The plan doesn’t need superlatives to say it’s great. If it’s great, readers will come to that conclusion. Also, make sure that your plan presents a focused strategy to solve only one problem in the target market.
2. Say “No Competition”
Every business has competition, either direct or indirect. A competitor is anyone else trying to sell to the same target market. His plan must show how he differs from the competition and demonstrate that he is stronger in the market.
3. Too long and technical
Your plan should convey your business idea in a concise manner. Any details that you think are important can be included in an annex. Also, your plan should not be too technical or scientific. keep it simple
4. Bad Organization
There is a logical way that business plans should be put together, and each section should flow logically into the next section. You can find hundreds of resources that tell you what the basic sections of a business plan should be, and you or any professional you hire should follow this advice.
5. Incomplete or Inaccurate Financial Statements
You must use the appropriate terminology to describe the financial situation of your company. Financial statements must contain sufficient detail to fully support your material assumptions.
6. Unreasonable financial projections
All figures in your financial projections must be reasonable and similar to the financial projections of other companies in your industry. Your financial statements must include income statements, balance sheets, and cash flow statements, all of which must be prepared in accordance with GAAP.
7. Writing errors
You must use proper spelling and grammar and cannot be redundant. Make sure your plan is attractive, interesting, easy to read, and professional looking.
8. Time errors
Have your plan in final form well before it is presented to investors. You may not have the 500+ hours required to write a business plan. So you should hire a business consultant to write your plan. Make sure another objective person reads the plan carefully and gives you some feedback on its effectiveness before you show it to investors.
