Mistakes To Avoid In Writing A Business Plan
Business owners and entrepreneurs have been writing business plans for ages now. The document is the idea and the vision of the company, acts as a roadmap for future growth and provides information on actions to be taken across departments for business success. Despite its integral role, often business plans fail to achieve their objectives and at times are a poor representation of your company causing problems for decision makers and hurting your prospects. Here are the top five mistakes business make when writing a business plan and how to fix them:
Ignoring the audience
There is never one business plan for all purposes. Without keeping in mind your audience, it becomes irrelevant and is detrimental to your business. Keep in mind who will use the business plan to make targeted and specific inroads into the concerns and growth strategies of your business. You should be clear from the start who will read your business plan and put it together in a way that answers their key questions, and is structured with the audience’s agenda in mind.
Putting irrelevant information
You are the top authority on your business. Often, businesses add minute details about their niche and value rather than keeping things relevant for the reader. This distracts and you stand the risk of putting them off. Write keeping in mind the key questions you want addressed. If the plan is for your team, give detailed description of products. If it is for investors, showcase numbers, growth metrics, how your product will generate revenues. The plan may be longer or shorter depending on the needs to gain the maximum benefits.
Misunderstanding your market
A big mistake is to misunderstand your market and being vague about the customers relevant to your business. This can be a big downer for investors interested in your business. A well-written plan will be succinct and give attention to detail. You should break down your market into segments to make it easier to identify targets. If you are a software company, putting the entire software market is a wasteful exercise if your expertise is in big data. Spend time understanding who your end-customer is and describe the features specific to that market segment.
For many entrepreneurs, the financial section of the business plan is the most difficult to articulate– perhaps due to unfamiliarity or perceived complexity of the task. But it can be simplified by making the financials tell a story. Be clear about your financial assumptions, your revenues, profit margins and what these projections are based on. The finance section should be easy to read and give the reader a firm grasp on your company’s numbers for productive future action.
What comes next
Putting your business value, marketing strategies, financials, and processes does not make it complete. It still lacks perhaps the most pertinent aspect – what’s next. Telling your audience how your business plan expects to help the company grow, how the markets identified will translate into new leads and revenues – helps the reader understand what your expectations are in the short and long term, and how to aim to achieve them.