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Avoid These Mistakes When Writing Your Business Plan

By Stella Hui This post may contain affiliate links. Please read our Disclosure for more information.

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Many of our clients are in the Startup phase of their businesses. They have great ideas but are not sure where to start, or they have started but don’t know how to continue.

One of the things I see a lot are business plans. I don’t necessarily think it is VITAL to have one; it depends entirely on the business and the individual running it. Some might say that a business plan is too rigid and doesn’t allow room for growth and change. Others think not having a business plan is the first step to failure.

Regardless, business plans are useful, even if it’s a light version. It sets your goals, keeps you on track, and analyzes the needs of your business.

And if you ever need funding to launch your new business venture, you’re going to need a business plan. Investors and lenders need to be confident they will see a return on their investment or that you will be able to pay back their loan. That means they need to see evidence that your venture is viable and worth their time.

You’re never going to convince someone to fund your venture if you have nothing more than, “a great idea for this new app”. A business plan can walk your financiers through the idea for your product or service, your business model, and your plans for making the business succeed.

It can only do this, however, if it’s written well and includes all of the necessary categories. Here are some common mistakes that I’ve seen entrepreneurs make when writing business plans. A lot of viable and potentially lucrative ventures never got the chance to launch because their creators made these mistakes.




 

Underestimating the Power of Proofreading

Spelling, grammar, and syntax count! No matter how brilliant your idea is, if you can’t clearly convey it to your investors or lenders, they’re not going to feel confident in your venture. Poorly written business plans, or those peppered with typos and spelling and/or grammatical mistakes look unprofessional and sloppy.

If you can’t take the time to proofread your business plan, your investors will wonder what else you don’t have the time for.  Are you cutting other corners? Are you really committed to making this venture successful?

Go over your entire business plan, line by line, and get your friends, family, and colleagues to do the same. All before you show your plan to any investors or lenders. Once you are sure that it’s perfect, then you can consider taking it to someone who can fund your project.

 

Where is the Information?

I’ve seen so many business plans done with pretty pictures and fancy borders, but has zero substance. Yes, graphs and tables might be necessary, but too many will be overkill. And you must make sure the information is actually of value. If you are showing a potential investor, they’re not going to care that you selected “wildfire pink” to represent yearly growth. They will only care about the growth itself.

Even if the business plan is for your own use, will fancy borders really give you a true depiction of the success of your business idea?

 

Glossing Over Risks and Potential for Failure

Every plan can fail, and every venture has risks. You need to include these factors in your business plan. If you leave them out or gloss over them, leaving them too vague, you are just fooling yourself.

Your investors and lenders want to know that you’ve thought this process out completely and you have a viable plan. Just because you don’t mention it, it does not mean the risk is not there. If you are going to bother to write a business plan, then be honest.

If it’s for potential investors, it is even more important to be real. If they have the money to invest in your business, they are not easily fooled. They can see when you’re trying to gloss over the risks and it will only scare them away.

Put the risks in, but also put in ways to mitigate the risk.

If you identify these risks, you can outline a plan for success. If not, your financiers will wonder if your plan will only work in a perfect world and if you will only succeed given no setbacks or challenges. And seeing as that world doesn’t exist, neither will your business!


 

Forgetting Your Audience

Now this is all well and good if your business plan is just for yourself. But if it is for a potential investor or lender, then it is your job to keep them interested.

If your investors can’t stay awake while trying to read your business plan, you’re not going to be getting any funding from them. Often, because entrepreneurs are so ensconced in planning their ventures, they’ll include every detail possible, down to minuscule bits of data that financiers just don’t care about.

While you do need to be specific with your plan, you also need to engage your audience with facts that concern them. Write confidently. Have a friend or colleague read each section and point out places where you were too vague or too detailed. Ask them where they felt their eyes starting to glaze over and work to liven those sections.

Your business plan could be the key to funding your new venture, or it could kill your venture before it ever launches; it’s up to you.



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