Mistakes to avoid when writing a business plan
Writing a business plan is a fundamental task that will help you to plan what you want to accomplish with your business. However, it is important to keep in mind what your business plan should and should not have in it. Writing a business plan that helps to set your goals and details how to achieve them is crucial, but you also want to write a business plan that will attract the attention of potential lenders and investors. It is important to keep in mind that even if your product or service, company, management, and marketing are spectacular if your business plan cannot communicate those facts there is little chance that you will get the funding you are looking for. Savvy business owners understand that lenders and investor see hundreds (if not thousands) of business plans every year. This makes it crucial to find ways that keep your lender or investor from saying no. The best way to do this is to avoid making certain mistakes. Here are the mistakes to avoid when writing a business plan-
- Not providing the solution that your company has-You want your potential lenders and investors to have a crystal clear idea as to why you are in business. Failing to let them know what your company can provide over your competition is one of the fastest ways to have your business plan tossed aside. You should be able to detail exactly why your customers will pay for what you have to offer them. Remember, that the bottom line is that the greater need or want your business can satisfy the greater the market potential. You want to show in your business plan exactly how you can solve your customer's wants or needs.
- Not providing the real value of your business-Remember, that your business plan is being read by well informed people. Failing to provide a realistic value for your business will cause them to question your management potential. Do not allow yourself to add hype or unfounded numbers to your business plan. You want your business plan to be comprised of facts that support the information you are giving any potential lender or investor.
- Not defining your target market-Your lender or investor will want to see that you know who your customers will be, why they will buy from you, and most importantly how they will buy from you. It is important to keep in mind that no business can be everything to everyone and any business that tries that strategy quickly fails. You need to make sure that you have done the right amount of market research that lets your potential lender or investor know that you know exactly who your customers are or will be.
- Not having a well defined marketing plan-A crucial part of your business plan is your marketing plan. You need to be able to show potential lenders and investors that you have a clear idea of how you will let your customers know what you can offer them. A shotgun approach to marketing is rarely effective so you need to have well defined marketing channels in order to generate customer interest.
- Not taking into account the competition-It is important to understand that just because there is not a product or store like yours in your locale that does not mean that you don't have competition. Today, because of the internet competition can come not just from down the street but from around the world. Failing to take your competition into account in your business plan shows potential investors and lenders that you don't really understand the market that you want to be a part of.