Where Your Business Plan Is Going Wrong And What You Can Do To Put It Right?
It is vital that every business has a business plan. It can help to attract investments, inform decisions and help to keep your business on track. Unfortunately, many business plans are simply not worth the paper they are written on and they often encounter the problems listed below.
The Plan Is Written Badly
Your business plan has to be written in a professional way which means that it has to read perfectly. All spelling, punctuation and grammar have to be right as well as the style. Of course, investors are not looking for businesses that are being run by those with impeccable English writing skills, they do look for other clues that relate to the business and the owner.
When a business plan is littered with errors, they might take the approach that you are someone who doesn’t pay attention to detail. They might also consider you as someone who simply doesn’t care and has very little focus, all of which are skills and characteristics that they expect from business owners.
The Presentation Is Lacking
If you are confident that your writing is perfect, have you considered the presentation and how it looks? Investors expect the plan to look consistent with page numbers, the correct margins, complete tables and charts with labels as well as other elements such as table of contents. You might have spent months working on your plan but an investor will take very little time at all because they know what they are looking for. They want someone who has put time and effort into their plan and they want it to be completed with precision.
The Plan Is Not Complete
Your plan has to be thorough to the point where it has to cover everything that investors expect it to cover. Your business will have customers but it will also have services or products while it will have marketing and sales as well as competitors. This is where you build a picture of your business and what it is all about and so, you have to cover these areas. You should also look to cover your industry and trends as well as how it is performing. Financial projections are also pivotal to the success of your plan because investors want to know how their investment is going to perform. So, consider including monthly cash flow, statement and balance sheets that cover three years as a minimum.
The Plan Lacks Detail
Every business plan has to contain the right amount of detail because if it is too vague, it simply won’t cut it. You need to make sure that it can be understood by someone who is relatively intelligent because that is what is expected of it. Perhaps you are keeping certain information vague for confidentiality reasons and if this is the case, then this should be included in the executive summary. If at this point they are interested, you can ask them to sign noncompete and nondisclosure agreements prior to sharing your plan.
The Plan Has Too Much Detail
Technical details can result in your business plan becoming bogged down and is commonly seen with start-ups in the tech sector. The technical details should be kept to a minimum because you don’t want to confuse or frustrate investors who are likely to be short of time and busy.
The Assumptions Are Unrealistic
Business plans are filled with assumptions with the main assumption being that your business will thrive and succeed. Critical assumptions have to underpin your business plan but you have to give reasons for them. If you include too many assumptions throughout the business plan, then investors won’t be able to determine what is fact and what is an assumption. Things such as market size or customer behaviours are all based on assumptions but if you can check these against assumptions, you can align your assumptions with facts.
The Plan Lacks Research
As mentioned, it is important that your assumptions can be linked to facts but these facts have to be able to hold their own. Investors might research these facts themselves so they have to be true and accurate. You should ensure that you learn as much as possible about your industry and your business. What motivates customers, what holds them back, what your competitors are doing and the size of the market and share. These are all facts that are important but remember that you don’t want to provide too many facts. Essentially, you need to back up assumptions and projections because everything will be checked and if they don't line up, you won’t obtain the investment you need.
You State There Are No Risks
Every investor will know that every business comes with risks. A no-risk business does not exist and so, you should be aware of the risks but you don’t want to include too many of them in your business plan. The aim should be to show how you will minimise the risks and you should be prepared to answer questions about them.
Your Plan Claims There Is No Competition
In an ideal world, every business would be free of competition but this is not the case. If you state this in your plan then you are missing the mark. Every single business will have direct and indirect competitors and you should plan for this. So, if you think that there is no competition you are likely to omit any information regarding how you will compete and explore competitive advantages.
How Can You Create The Perfect Business Plan?
Writing a business plan can be a challenge and you can make a catalogue of errors that render your plan useless. There is a lot to consider and naturally, you want to get it right the first time. Therefore, you might want to consider using a business plan writing service. They will be able to take all relevant information in order to create a clear and concise business plan that works.