The most common business plan mistakes
If you want investors and lenders to believe in your plan, don’t fall foul of these common pitfalls.
When it comes to starting a business, you need lenders and investors to believe in you and your idea, to help you flourish and take those first steps towards making your idea a reality. Of course, this means putting together a business plan and presenting it to those people, who you hope will give you the cash to move forward. Whether you’re starting your first business or your fourth, there are some very common business plan mistakes that are made time and time again, many of which could render your attempt to present your idea to these people totally pointless.
If you want your new business to succeed, your business plan needs to be flawless. Avoid these common business plan mistakes and give yourself a huge boost in the right direction.
Not identifying your audience
Every business will call out to a specific group of people, because no one product or service will suit every single person on the planet. You need to do plenty of market research to identify who your target audience are, and this needs to be highlighted in your business plan. If you don’t do this then your plan will look ill-prepared, and no-one is going to lend money or invest in a business which isn’t ready.
Being too financially hopeful
Again, money lenders and investors aren’t going to hand out cash to a business who can’t tell them where they are at the present time, and where they see themselves in a few years’ time. You need realistic projections, not ideas coming from blind hope. Statistics and figures need to make up a major part of your plan, and projections need explanations to back them up. One of the most common business plan mistakes out there is not backing up financial forecasts with solid evidence.
Having your head in the clouds
It’s important to believe in your idea, but getting too excited about it and not having your feet on the ground, not being realistic about the road ahead, can be off-putting to lenders and investors. Your business plan needs to be solid and dependable; again, you need to back everything up with well-researched figures and statistics. It’s admirable to be passionate about your idea, but it needs to be backed up.
Forgetting to mention the competition
Every business is going to have to competition of some sort, as it’s unlikely you’ve come up with a totally unique idea. Your plan needs to identify who your competition is, how you can be different, and how you can overtake them and sustain it. If you don’t identify this then it’s quite possible your business won’t survive.
Everyone has weaknesses
One of the most common business plan mistakes and misconceptions, is that people think in order to get money invested in your idea, you have to show that your business will be perfect. This is totally incorrect. No business is perfect, and every idea has weaknesses, however the important thing is to identify these weaknesses, point them out, but then address how they can be rectified and managed effectively. Be realistic!
A well-written, double-checked, and comprehensive business plan should help you gain the investment you need to start your new venture; avoid these common business plan mistakes and look forward to the future.
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