Writing Your First Business Plan For Your Startup: Mistakes to Avoid
Your business plan can be an exceptionally useful tool if you take the time and care to ensure it is complete, accurate, and well-thought-out.
Many entrepreneurs see a business plan as a required deliverable when pitching investors. It can certainly be used for that purpose, but it is also a valuable resource and road map for your business.
Of course, the value of your business plan depends entirely on its contents. If you write a fundamentally good business plan, it will be an asset to you as you launch your business. To do that, make a dedicated effort to avoid the following mistakes.
Failing to Produce a Polished Final Copy
Your business plan is a working document. In fact, you may find yourself making changes to it even after you launch your business. In spite of this, it’s important that you maintain quality and editorial standards for your document.
Obviously, if you plan to distribute your business plan to potential investors, it should be edited and printed on quality paper stock. Even if it is not, you should still take care that your business plan isn’t sloppily written and full of mistakes. This is one of your founding documents, and it’s imperative that you take it seriously.it takes very little time to proofread your document. Don’t forget to double-check your calculations for accuracy.
You Fail to Bolster Goals With a Strategy
Everybody wants their business to be the best and most successful of its kind. That is a lofty goal, but ultimately useless without a clear strategy behind it. In fact, that’s not even a fully formed idea. That lofty goal needs to be polished and honed until it is a well-thought-out objective. Then, you need to create a strategy to meet that objective.
That strategy should consist of action steps. Then, you must define who is responsible for these steps, when they should be finished, and which deliverables are required. Potential investors don’t need to know what you plan on accomplishing. They want to know how you plan on getting there.
You Don’t Show Any Skin in The Game
You cannot expect investors to take a risk with their assets by investing in your company if you’re not willing to take a financial risk yourself. It should be clear in your business plan that you are financially committed to your business as well as dedicating an adequate amount of time to its growth.
Your business plan should detail how much you’ve added to the pot financially to launch your business. If you have partners, that information should be included about them as well. You should also indicate what you have done to raise funds from other sources, and how much funding you have received from those efforts.
Your Plan is Too Vague
Investors fear the unknown. If your plan is not clear and detailed, potential investors will worry that you have not carefully considered everything. Avoid using vague terms, and back the claims you make with details, for example, if you say your product is revolutionary, you should be prepared to explain exactly why it’s revolutionary. Show your work, and provide data.
If you don’t plan to pitch your business plan to investors, you should still create a detailed business plan. This document will be a guide for you and your team going forward. You don’t want to have to fill in the blanks a year from now.
You Set Unrealistic Goals
Any good entrepreneur is excited about their business, and they hope for the best possible results. However, your business plan shoes reflect a realistic, conservative view.don’t overstate what you think you can accomplish in order to impress your investors. More importantly, don’t allow your business plan to become document peaceful thinking.
Your business plan should be honest above all Else. That means acknowledging current struggles, and struggles you might face in the future. It should contain information about your shortcomings and weaknesses, and about any threats to your success.
Your business plan should be positive, and you should share your goals. Just be certain that investors will see that those goals are based in reality, and that you have a plan of action to complete each goal.
Remember that you will never look bad for doing better than you predicted. You will look bad if you underperformed by failing to meet the goals established in your business plan.
Failing to Include a Statement of Purpose
Why are you starting your business? What problem will you be solving with your product or services? Who will your business help? The answers to these questions combined provide an answer to a more comprehensive question. What is your purpose in starting your business?
When it comes to maintaining your focus and motivation, having a clearly written statement of purpose can be a wonderful thing. In addition to that, it can provide clarity to potential investors about your reasons for starting your business, your commitment to it, and provide a framework for your business model. This is important enough that you might want to enlist Studyker to write a clear statement.
You Fail to Consider Potential Problems And Challenges
No business is going to launch without challenges. You may be up against established competitors. There may be questions about how you will obtain the supplies you need in order to fill the orders you anticipate. Whatever the case may be, don’t leave these things out of your business plan. Document them in as much detail as possible so that you are the best able to explore solutions.
You Show a Lack of Understanding of The Basics
A business plan is a document that contains a significant amount of information about your business. Some of this information might be unfamiliar to you. Others you may understand, but be unsure of how to find and communicate the information you need to. You may wonder:
- What valuation is, and how you calculate it?
- How to conduct a competitive analysis?
- What a barrier to entry is, and how you can use it to your advantage?
- How to calculate your financial projections?
If you lack business experience, you may struggle here. Unfortunately, these aren’t elements that you can ignore. Potential investors need this information, and they need it to be accurate. Fortunately, you may be able to get help. There are organizations such as the SBA that provide emerging entrepreneurs with the education and mentorship they need. You can take online courses designed for entrepreneurs, and follow successful entrepreneurs for inspiration.
Your business plan is a valuable document that will help you stay on the right path as you launch your business. As long as you avoid the mistakes listed above, you should be able to use your business plan to attract investors, and clearly communicate your vision.