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4 - Common Mistakes In Business Plans
Because your business plan is the first thing that potential investors will see in relation to your proposed company, it's important to avoid some of the common mistakes people make when drafting up a business plan for the first time. If you can avoid these mistakes it will be easier to get the resources you need to make your dreams come true.
The biggest mistake people make is to come up with unrealistic financial projections. Don't be too optimistic with regards to sales projections, but at the same time, try not to be too vague about the amount of profit you think your company can make in the next few years. Of course, it's impossible to come up with an accurate figure when you're dealing with so many unknowns, but it's imperative that you make reasonable suppositions and provide supporting information and figures to back it up your claims. As long as you research the numbers and arrive at financial projections in an organized way, the banks will be impressed.
The marketing section of a business plan is also important. Most business plans fail to mention how their product or service is going to help the customer with a particular problem that needs a solution. Providing something of value to the customer is the crux of any marketing plan. Your business plan has to show how your product or service provides the solution to a specific problem. A big mistake is to make the claim that your product or service is something that "everyone needs." Lenders have heard this a million times before, and they know that it's a ridiculous statement. All this does is let investors know that you haven't done the proper market research. Focused marketing works best so you have to know your market before you delve into the business world. Similarly, don't say that you don't have any competition. This just isn't true! Every business has competition, so there's no point in making the statement on your business plan.
Finally, craft a business plan according to the audience for which it's intended. If you're putting together a business plan for a lender or banks, it has to be written differently than if you're planning to approach a group of investors. For instance, banks just want to know if you'll be able to repay your debts, while investors are more interested in the potential for profit. For both parties, stick to the facts, write clearly, and don't make things too complicated. If you can't write a business plan on your own, don't shy away from hiring an expert to do it for you. This will save you time and may afford you the success you've been dreaming of.
By: BizWebtips.com
