Typical Business Plan Mistakes
Okay, you’ve finally written your business plan. But will it help you secure the funding you need? Will it help you build a successful business? A business plan is a double-edged sword—it allows you to introduce and sell your business, but it also gives the reader an opening to say no. Don’t blow your big chance.
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Okay, you’ve finally written your business plan. But will it help you secure the funding you need? Will it help you build a successful business? A business plan is a double-edged sword—it allows you to introduce and sell your business, but it also gives the reader an opening to say no. Don’t blow your big chance. Now more than ever, you only get one chance to make a good first impression. Here are some key mistakes to avoid from an expert who specializes in helping her clients create successful business plans.
- Too much jargon
If readers can’t understand what you’re saying, they won’t buy in. Another caution: Go easy on the latest jargon. If your business plan is laden with the latest “sexy” buzzwords, readers’ antennae go up. Are you using fancy words to hide a lack of substance? Better to write a user-friendly, straightforward business plan.
- Great idea, but customers will not pay for it
You may have a great idea, but that’s no guarantee that customers are willing to pay for it. An important question to ask is, “What problem am I solving for paying customers?”
- Too many generalizations
Discuss your specific solution to solve the problem. Support your statements. Too often, business plans are filled with superlatives, generalizations, and over-the-top optimism—guaranteed red flags.
- Selling it
Too many entrepreneurs fall into the trap of thinking, “If I build it, they will come.” You need to explain how you are going to sell your product or service.
- Unrealistic assumptions
A good business plan has realistic assumptions. A seasoned investor can spot unrealistic assumptions a mile away. Even if you’re self-funding, what good will it do you to be unrealistic? Another caution: The numbers need to support the story.
- Competitive position that can’t be defended
You may have a great idea, but, if it’s successful and competitors can copycat it, what good is that? Being first is no guarantee of maintaining market share.
- Don’t write your executive summary first
How can you summarize what you haven’t yet written? Writing a business plan is a process, and there are no shortcuts. Your business will evolve and take shape as you think through all the issues, big and small. This evolution is a critical part of the plan writing process, and the results will inevitably show in your executive summary. You need to write it last and write it well—once you get in the door, it’s the hook that will entice an investor to look deeper.
Source: As a seasoned start-up advisor and founder of Startup Distillery, Diane Tarshis has spent 20+ years helping entrepreneurs across the U.S. and around the globe start and grow their businesses. You can reach her directly at (773) 871-0110 or by visiting her website at startupdistillery.com.