I’m going to make a bold statement: business plans are boring. No one is going to read the whole thing, and if they do it’s only because they have to. That’s why I’ve compiled this list of ten mistakes that writers make when writing their business plans. Hopefully, you’ll learn from them so that you don’t have to go through the same pain!
| Takeaways |
|---|
| 1. Writing a business plan is crucial for any entrepreneur looking to turn their idea into a reality. Avoiding common mistakes in the planning process can significantly improve its chances of success. |
| 2. Conduct thorough market research to understand your target audience, competitors, and industry trends. This knowledge will help you create a more informed and effective business plan. |
| 3. Clearly define your business’s unique value proposition and competitive advantage to stand out in the market and attract potential investors. |
| 4. Pay attention to the financial projections and ensure they are realistic and well-supported by data. Investors will closely scrutinize your financial plan before making a decision. |
| 5. Seek feedback from mentors, advisors, or industry experts during the business plan writing process to gain valuable insights and refine your strategy. |
Trying To Make It Too Perfect
Many business owners think that their plan must be perfect. If there’s one thing you understand by now, it’s that there are no perfect plans. The goal is to get all the right information in the right place and make sure it reads well.
The best way to do this is by organizing your thoughts into a cohesive format, using consistent language and terminology throughout, and then writing as if you were speaking directly to an audience of investors or lenders (which is exactly what you’re doing).
To create an outline for your plan:
- Use word templates or templates from sample plans online
- Write out each section in bullet points so they’re easy to organize later on
Writing a business plan is the first step towards turning your idea into reality. It provides a solid roadmap for your venture’s success. Learn more about the importance of writing a business plan and how it can shape your entrepreneurial journey.
Using The Wrong Templates
When you’re working on a business plan, it’s tempting to use the first template you come across. The problem with this approach is that not all templates are created equal. It’s important to pick a template that’s relevant for your business, and appropriate for the type of company you run.
There are many different types of templates available online: some are too simple, some too complicated and others simply don’t have enough room to write down all the details required by lenders and investors to make sound decisions about whether or not they want your business as part of their portfolio.
Here are three tips on how to choose the right kind of template:
Trying To Create It All On Your Own
Failing to get help from professionals and peers, family, friends, mentors and your community will only cause you to waste time.
You must take advantage of all of the resources that are available to you. Business plan writers are not trained in every area of business success and failure. They may not even know what questions to ask or how to ask them.
The best way for writers to learn more about their clients’ industries is by talking with other people who work in those fields, not just the ones they write about but also their competitors as well as local businesses that serve customers similar to theirs.
The same goes for marketing plans: A writer should try writing one herself before asking a client if she wants one written. This gives her some experience with this kind of project so she can better advise her clients on whether they really need one (and if so how far along it should be before being sent out).
Not Understanding Zeros In Business Plans
When you’re writing a business plan, it’s easy to get caught up in the details of your company and forget that some things are universal. This is one of them!
Zeros (zeroes) are used to show that something has been multiplied by 10 or 100. For example:
- 100 people = 1,000 people
- 10 units = 100 units
This concept is pretty simple but when writers start using zeros incorrectly, you can end up with weird phrases like two thousand dollars instead of twenty thousand dollars. When writing a business plan, always follow this rule: only use “zero” if you mean “zero.”
Creating a comprehensive business plan is essential for any aspiring entrepreneur. Follow our guide on how to write a business plan in 9 simple steps to ensure that your business idea is well-structured and ready for success.
Not Looking At The Big Picture
The big picture is the most important part of your business plan. It helps you set goals and shows what you will be doing to reach them.
The big picture should contain:
An executive summary that summarizes the entire plan in one paragraph
An organizational chart showing how everything works together and who reports to whom, along with a description of each position and its responsibilities (this info should also be available in your job descriptions)
A table of contents and an index listing all sections in order so anyone can flip through it quickly if they need something specific right away (this will make it easier for people who don’t have time for reading through every word as I do)
Talking Too Much About Your Competitors
You should not focus on your competitors. You need to focus on your own business, not your competitors. Your target customers are the ones who will buy from you and not from them.
Competitors can be friends or enemies: they might be both at the same time.
For example, you might have a competitor who is good friends with another one of your competitors but is an enemy of yours because he thinks you’re a threat to his business and has been trying to get rid of you for years by any means necessary (like secretly bribing people in charge of awarding contracts).
Not Showing How You Will Make Money
You can’t expect potential investors to support your business if you don’t show how you’re going to make money. But this is a mistake that’s made, even by experienced business plan writers.
A good way to show how you will make money is by including information about your market and customers, then describing the products or services that customers will buy from you. For example:
- We believe there is an opportunity for our software because it lets companies predict their future sales based on historical data.
- Our product will be sold on Amazon and other online stores for $99 per license (or $49 per month).
- We estimate that we’ll sell 10,000 licenses in the first year after launch and half again as many each year after that until we reach 100 million licenses in 15 years (which would be 5% of all office workers worldwide).
When writing your business plan, avoid common mistakes that could hinder your success. Our article on 8 mistakes to avoid when writing your business plan highlights critical pitfalls to steer clear of during the planning process. Keep these tips in mind to create a robust and effective business plan.
Not Using The Right Language In A Business Plan
A business plan is a sales document, so you want to use language that will be easy for your reader to understand. Use plain English and avoid jargon or industry-specific terms.
If you are writing a plan for investors, use the language of investors in general, not just your vocabulary.
If you are writing a plan for bankers, speak their language rather than using buzzwords like “synergy” or “monetize” which might mean something different to each person in the room depending on what kind of company they work at (and even then it could be interpreted differently!)
Using Industry Jargon Not Understood By Nontrade People
One of the most common mistakes I see in business plans is using industry jargon that’s not understood by nontrade people. It is important to make sure you are using terms that are understood by your target audience.
If you’re writing a plan for someone outside of your industry, avoid using terms that would be more familiar to insiders than non-insiders. To help ensure that this doesn’t happen, use an outside editor or someone familiar with your industry to review the document before it goes out the door so they can advise on any potentially confusing terminology.
Every successful business plan should address crucial questions that potential investors might have. Check out our article on 12 questions every business plan answers to ensure that your plan covers all the necessary aspects of your venture.
Don’t Try To Do Everything On Your Own And Don’t Be Afraid To Ask For Help From People With Experience
If you want to be successful, don’t try to do everything on your own, and don’t be afraid to ask for help from people with experience. This is the most important mistake that business plan writers make.
The truth is that if you’re going to write an effective business plan, it should have at least one other person involved in creating it. Even if this person only has been through the process once before or isn’t necessarily an expert at writing business plans, having someone else around can help guide you through the process and ensure that everything goes smoothly.
Asking for help doesn’t mean that you’re incapable or can’t do something on your just means that getting extra eyes on your business will ensure a higher quality product in the end!
Just remember: when it comes down to it, no one knows more about what makes their own company successful than they do themselves so never shy away from asking questions along the way (and always take notes!).
Investors receive numerous business plans, so it’s crucial to make yours stand out. Find out how to write a business plan that grabs investors’ attention with our guide on how to write a business plan that investors actually read. Make your plan a compelling read for potential backers.
Conclusion
You may be a little overwhelmed by the idea of writing a business plan, but it’s worth the effort. The key is not to try to do everything on your own. There are plenty of templates and other resources available for business plan writers, so don’t be afraid to ask for help from people with experience.
Further Reading
Top 10 Business Plan Mistakes to Avoid: Learn about the most common mistakes entrepreneurs make when creating a business plan and how to steer clear of them.
Avoid These Common Business Plan Mistakes: Discover the essential tips for avoiding common business plan pitfalls and increasing your plan’s chances of success.
Seven Common Business Plan Mistakes: Find out the seven frequently occurring business plan mistakes and valuable advice on how to rectify them for a stronger business strategy.
FAQs
What are the key components of a comprehensive business plan?
A comprehensive business plan typically includes an executive summary, company description, market analysis, organization structure, product/service offerings, marketing strategy, financial projections, and an implementation plan.
How can I avoid making critical errors in my business plan?
To avoid critical errors, thoroughly research your market, target audience, and competitors. Seek feedback from mentors or advisors and consider professional business plan writing services if needed.
What should I emphasize in the executive summary of my business plan?
The executive summary should provide a concise overview of your business, highlighting its unique value proposition, target market, competitive advantage, and financial objectives.
How can I make my business plan more appealing to potential investors?
To make your business plan more appealing to investors, focus on demonstrating a clear market need for your product or service, showcasing a strong management team, and presenting a well-thought-out financial plan.
What should I do if my business plan is not achieving the desired results?
If your business plan is not yielding the expected results, assess your strategies, conduct a thorough review, and consider making necessary adjustments to improve its effectiveness. Seek feedback from industry experts if possible.
Costantine Edward is a digital marketing expert, freelance writer, and entrepreneur who helps people attain financial freedom. I’ve been working in marketing since I was 18 years old and have managed to build a successful career doing what I love.
