jQuery UI Tooltip - Default functionality


Business Plan Mistakes
What Not To Do!


Meet Deb Mason


Please Note: This Site Receives Commissions From Affiliate Links And Third-Party Advertising. 

  1. eBizBAM Home
  2.  ›
  3. Business Planning
  4.  ›
  5. Business Plan Mistakes - What Not To Do

The business plan mistakes detailed below are very common in small business plans and any one of them could seriously damage your credibility with potential business partners or investors.

creating an online home business

Creating a business plan can be a painful process, so if you are going to go through the pain it doesn't really make any sense to not do it properly.

Cutting corners, or playing with the numbers to make them look better is not only unprofessional (and a bit shonky), it is ultimately pointless as it will render your business pretty much useless.  

The whole point of business planning is to work out whether or not your business idea is viable.  

Can you make any money with in this business with the business model that you are proposing.  The business planning process will only be helpful if you actually do the work.

Analyse your market, refine your product offering based on consumer preferences, get your production processes right and work out how you will interact in your competitive environment and you might have a shot at making it through the first year in business without wasting a lot of time and money and utlimately going broke!

Common Business Plan Mistakes

So what are some of the more common business plan mistakes? Glad you asked, here are a few things to avoid when you are working on your business plan...

Not Writing for the Right Audience

Who will be reading your plan? You need to write the plan with the needs of your target audience in mind, and if you are intending to share your plan with more than one target audience, then maybe you need to have several versions of your plan.

You might create one for financiers or commercial investors and one for family and friends who are thinking about bank-rolling your business.  Or maybe you need another one for your employees.  The one you create for yourself, that you will use to manage the business will be less polished but have more depth in your operational, financial and management planning sections, with tighter performance targets and detailed corrective measures for any deviations to the plan.

If you do create more than one version of your plan, just be careful that you don't hand out the one for your family to the local bank manager, or give the financier plan to your employees!

No Research to Back Up Your Claims

Do the research. I can't be any clearer than that.  If your prospect asks just one question about the claims you make in your business plan and you are not able to answer them, it is all over. This common business plan mistake is easy to avoid, you just need to -

Do the research, analyze the data and understand what it means, before you put anything down on paper!

Click here for more information about Small Business Market Research

Over-estimating the Value of Your Business Idea

Do you have a good business concept?

If it is a new idea, or you have developed a new product or an improved method of delivering an existing product to your customers, you need to demonstrate that your assumptions about the demand are reasonable.

This is the very core of your business plan.

If you make this type of business plan mistake and over estimate the value of the product or service in the market, none of your strategies, goals or objectives are likely to be achieved.

No value = no sales = no profit, no matter what your plan says.

All Flash and No Substance

Is your business plan going to be printed on high quality glossy paper with custom designed graphics? Have you selected an expensive binding?

Don't.

You are better off spending the money on obtaining high quality data on your industry or paying someone to put together your financial data for you. Most of the people who read your business plan are unlikely to be impressed with the presentation if the content is not substantial and designed to answer their questions about your new business.

Having said that, you do need to pay some attention to the presentation.  Spelling, grammar, page layout are all important if you intend to share the document with anyone else.

You need to make your document as easy to read as possible and regardless of how well you think you write, investing in someone to proof read your plan for you is a good idea.  One of the tricks our minds play on us is that we tend to "read" what we think we wrote, rather than what is actually on the page.

Inconsistent Use of Data

If you say that you are expecting $100,000 worth of sales in your first year of operation in the section about your sales projections, make sure that number is reflected in your profit and loss forecasts as well.

If you are planning to offer credit to your customers make sure that the cash flow projections recognize the cash coming in at the end of the credit period rather than when you make the sale.

These are just two examples of how an inconsistency can occur in your business plan. Inconsistency is a fatal business plan mistake and can mean that you are doomed to failure before you even start. Check and re-check everything to make sure your plan flows and actually make sense (find a proof reader with a critical eye to check your information flows throughout the document).

Creative Accounting

What ever you do not get creative with the numbers!

When you are starting a small business the primary reason for writing a small business plan is often to use it to seek funding. If this is your reason for creating a business plan you should bear in mind that the people who will be looking at it will have a lot of experience with reading proposals for new businesses.

In all probability they will have knowledge of the industry, not to mention experience with business management. If they are good at what they do, and you need them to be, they will know their stuff when it comes to accounting for business.  They will spot any creativity in your numbers a mile off!

And if you are creating the plan to help you manage the new business, making this kind of business plan mistake is just silly.  

Seriously, who are you trying to impress?  Being creative with the numbers when you are the only one who will see the plan is just a form of self-defeating delusion. You need to have a clear understanding of how your business should operate - warts and all - if you have any hope of succeeding.  So save the creativity for product development or relationship management.  Creative solutions for real issues are good, creative accounting is bad...


Related articles you may be interested in reading:


Back to the top of Business Plan Mistakes
Back to the eBizBAM Homepage 



Couldn't Find What You Were Looking for?

Try searching the site using the search box below:

Recent Articles

  1. eCommerce Online Business

    Apr 11, 18 10:10 PM

    An eCommerce Online Business involves creating an online or virtual store front. Your eCommerce site will be open 24-7 and will continue to operate even when you are asleep.

    Read More

  2. Accept Payments Online

    Apr 11, 18 08:47 PM

    If you are planning on incorporating e-Commerce as one of the methods of making money from your online business you are doing to have to consider whether or not to accept payments online and which mec…

    Read More

  3. Choosing Keywords

    Apr 11, 18 06:00 AM

    What to consider when you are choosing keywords for your site, why keywords are important and what you should and should not do with them.

    Read More


Special SiteSell Promotion