A business plan is crucial for any business. It’s an invaluable tool that not only helps you to obtain financial backing, but also sets out business objectives, clarifies your vision and audience, and creates a roadmap to success. There are many components to a good business plan and if you want the biggest chance of succeeding, it’s important that you get them right and avoid the common pitfalls. Here are 4 business planning mistakes to avoid and how to make it as good as possible.
Not writing one
The biggest business planning mistake you can make is simply not writing one. Many people believe you only need a business plan if you want to get funding from the bank or investors. But in actual fact, it helps you to plan out your business, iron out any weak points or issues, make financial projections and evaluate whether your idea is as viable as you think it is. You will likely modify your business plan as you go along, but it’s useful to have something to guide your venture.
Another very common business planning mistake is making unrealistic projections. We get it – you want your business to look as impressive and potentially successful as possible. However, if your projections are unrealistic, especially your financial projections, you risk turning off investors if they realize you’ve over-hyped the financials. If you watch Dragon’s Den or Shark Tank, you will see that investors with inflated financial projections don’t get deal agreements. Also, you want your projections to be as accurate as possible so you can establish proper goals and milestones for the future.
It’s one thing having a great idea, but it’s another putting it into action. A great business plan will include in-depth research and an evaluation of the market. It will highlight why the business will be successful, whether there’s a gap in the market, the key consumer market, and how the business will differ from its competitors. If you’re hoping to secure funding, you need to be able to convince your investors that there’s a need for the business, and the best way to do that is by knowing the market inside out.
Not knowing when to seek help
Business plans can be difficult to get your head around, especially if you’ve never made one before. If you’re struggling to put a plan together that properly represents your business, don’t be afraid to seek help from a business planning specialist to make sure that it’s free of errors, it reads correctly, the financial projections are accurate, and it portrays your business in the best way. Hiring a pro is the best way to avoid a business planning mistake.
For business planning advice in western Canada, get in touch with Route One Research today.