What are the most common mistakes when writing a business plan? Here is my list of the ones to make sure you avoid. While including the necessary items in a business plan is important, you also want to make sure you don’t commit any of the following common business plan mistakes:
Putting it off.
Too many businesses make business plans only when they have no choice in the matter. Unless the bank or the investors want a plan, there is no plan.
Don’t wait to write your plan until you think you’ll have enough time. “I can’t plan. I’m too busy getting things done,” business people say. The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.
Cash flow casualness.
Most people think in terms of profits instead of cash. When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained to think of business as sales minus costs and expenses, which equal profits. Unfortunately, we don’t spend the profits in a business. We spend cash. So understanding cash flow is critical. If you have only one table in your business plan, make it the cash flow table.
Idea inflation.
Don’t overestimate the importance of the idea. You don’t need a great idea to start a business; you need time, money, perseverance, and common sense. Few successful businesses are based entirely on new ideas. A new idea is harder to sell than an existing one, because people don’t understand a new idea and they are often unsure if it will work.
Plans don’t sell new business ideas to investors. People do. Investors invest in people, not ideas. The plan, though necessary, is only a way to present information.
Fear and dread.
Doing a business plan isn’t as hard as you might think. You don’t have to write a doctoral thesis or a novel. There are good books to help, many advisors among the Small Business Development Centers (SBDCs), business schools, and there is software available to help you (such as Business Plan Pro, and others).
Spongy, vague goals.
Leave out the vague and the meaningless babble of business phrases (such as “being the best”) because they are simply hype. Remember that the objective of a plan is its results, and for results, you need tracking and follow up. You need specific dates, management responsibilities, budgets, and milestones. Then you can follow up. No matter how well thought out or brilliantly presented, it means nothing unless it produces results.
One size fits all.
Tailor your plan to its real business purpose. Business plans can be different things: they are often just sales documents to sell an idea for a new business. They can also be detailed action plans, financial plans, marketing plans, and even personnel plans. They can be used to start a business, or just run a business better.
Diluted priorities.
Remember, strategy is focus. A priority list with 3-4 items is focus. A priority list with 20 items is certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.
Hockey-stick shaped growth projections.
Sales grow slowly at first, but then shoot up boldly with huge growth rates, as soon as ‘something’ happens. Have projections that are conservative so you can defend them. When in doubt, be less optimistic.
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This article has been a help for me in writting my plan.
Thanks for the advice.
Althea
To whom it may concern:
I appreciate the free online information to starting a successful business. The economy isnt doing well and this is a good way of treading water instead of sinking to the bottom and drowning. Thank you and god bless
Thank you for the wonderful advice. It will certainly help me in starting and running my business.
keep up the great work and lets keep sharing.
Great advice. It’s definitely a monster to tackle. I’ve been trying to complete this thing for months. I strongly suggest anyone looking to have their plan done to go to Bank Ready Plans. They were extremely helpful, and finally took the nightmare off of my hands.
It is very unfortunate that you falter from the point. You fail to answer the tough questions like how to tackle such a gigantic project through the SWOT and marketing profile. Ultimately this fails, but nice try.
Good day to you sir and good luck.
To whom it may concern
This is a great help, keep up the good work!
Thanks
Taimur
Dear Sirs,
Thank you for your great business plan for my start a cofe shop
Best regard
HAMZA
Hi
This is the first time I came across your website. I have just registered a business and trying to get some tips on putting together a business plan. You made it very easy to understand and you also made me realise that it is more of common sense that needs to be applied.
Thank you
Ntsoaki
South Africa
Thanks, helped a lot put my thoughts together and start my own project
Ayman
Bahrain
Hi,
this is the first time i came across this website. I want to prepare a business plan for a small scale business for the mien time and i need some help on how to go about it.I also do not have any capital at all but still want to start something.
Thank you.
Martha
Ghana.
Hi,
The informations are encouraging keep it up.
Thank you
Martha
Ghana.
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Hi!
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Thanking you for the ideas you have given
Danish Qureshi
I’m taking a business class at my school (E-360) and we had to write a business plan for a panel of judges. I had struggled with the plan and started to have second thoughts when my cousin sent me the link to this site. I read this page and a few others and was amazed at the information I recieved. Looks like my web design business will prosper after all. I take my hat off to you guys.
Thanks a bunch,
Nathan M. Cunha
“You don’t need a great idea to start a business; you need time, money, perseverance, and common sense.” Great advice. Thanks Tim.
Reading through vaious articles on your site gave me a graet relief about different hassles have been struggling with in growing my bussiness.I really appreciate you effort in proferring solution to the different problems associtaed with writing and growing a business.
“You don’t need a great idea to start a business; you need time, money, perseverance, and common sense.”
That was a great one
your articles have boosted my morale n very soon i am gonna open my own company. i am just 18 so can u guide me how can i get funds?
thats a great advice and it will certainly help me in starting my own business.
I appreciate the useful information.
I already found my plan and customers through the lines and words I read here.
Sincerely,\\Sa’eed/ Norway
I really appreciate your materials on Business Plan website links, it has widen my scope on business concept.
Big Thanks.
Fulani/Nigeria
Just reading your article I feel so confident that I can get my business started amidst the harsh economic climate..Thank you very much
your articles has built my confidence in writing a business plan as a project.thank you for your good work.
everyone/ everything is there because of business. please keep up the spirit of educating the world.
Many thanks for your free online expose on business plan. It has elicited some key problem areas in writing a business plan. This site is highly recommended for a would-be new business owner
This is excellent advice some of which I’ve heard before. Great reminder. Thanks!
I especially appreciated the section on hockey-stick shaped projections. I have been told I am a negative thinker, but this justifies my rational thought. The world is business is not always butterflies and rainbows
.
Thanks very much for Tim berry has puting this out to the community .
It is so much help for the project that i’m in.
Thank you very much. My brother is starting a business and he thinks he’s got a great idea. I will educate him about the other things.
Thank you for information. It’s truly enlightening. I can now confidently manage my business with advice and tips on this website.
I don’t know why I am stuck and cannot move forward. There is so much information available to help me and I keep asking myself, “What is your problem?”
Great list. I recently wrote an extensive list of the Top 50 Business Plan Mistakes Ever at http://www.squidoo.com/business-plan-mistakes. I have copied just a few of them below.
These are 5 business plan executive summary mistakes.
1. Executive Summary is Too Long – 2 pages or less
2. Fails to Compel Reader – Your executive summary needs to intrigue the reader to read the rest of your business plan.
3. No Contact Information – Imagine your executive summary does its job and excites the reader, but then they have no way to contact you to learn more
4. Crammed in Information – You don’t need to stuff every detail into your executive summary. Focus on the quality of information not quantity
5. Summarizing your Business Plan – The purpose of your executive summary is to sell not to simply summarize your entire business plan.
It gave an edge to my knowledge and I can confidently now start working on my business plan.
Hi thank you for the great advice on how to write your own business plan, you have really helped me to overcome my doubts. I like the line “plans don’t sell a new business idea to investors, people do”. This has given me some confidence in myself to go ahead and and sell my idea to my investors. Thank You
your advice is worth a million dollar i have benefited from it
Yes, many think that a business plan is plan of a new idea/invention. But business ideas don’t have to be a new invention.
Great read!
@darrell193
thank you for your wonderful business plan
thanks for the sample business links, this will come to good use in the future
This was very helpful. Thanks!
Good point on the ‘idea inflation’ ! Probably 99% of businesses out there are not really new or that creative. In the US alone there are 480,000 restaurants… sure there may be a ‘twist’ to some but really no great idea required in order to be successful!