What are the most common mistakes we make when writing a business plan?
There are many mistakes that inexperienced entrepreneurs discuss writing a business plan or do not understand why potential investors reject their plans.
But there are a few mistakes that are common to almost all of them:
1. Ignore the competition
A business does not operate in a vacuum. There are direct and indirect competitors will fight tooth party to maintain its current customer base and market share.
Often, the entrepreneurial team declared that their products or services are so impressive that they have no competition.
This statement tells investors that the management team is over confident and can not anticipate external factors that can impact the business.
It is of course also the possibility that it is true that there is no competition because there is, at least at that time, a market for that product or service.
2. Financial projections unrealistic
What investors want to see is a growing company, but we also want to see financial projections are realistic and achievable.
The financial data inconsistent with the usual rules in this very aggressive business or can quickly archive your project. It is better to be conservative and work with our professional accounting numbers to show attractive but realistic.
3. Millions of consumers
Pretend that your market is huge and that everyone is a potential customer will quickly lose your own credibility in your business plan. You may be able to undertake in the future different market segments, but for now it is better to focus on one or two niches that you can actually attend.
By showing that you understand the needs of a small market and you can serve your needs, you gain the confidence of potential investors or your bank.
4. Procrastination
Many / os entrepreneurial / s underestimate the time and effort required to build a successful business plan. Do not delay. If you’re going to need capital in six months, now is the time to establish a plan and raise the money.
5. The big deal
A company may have signed an agreement with a large company but the overemphasis on that agreement may be perceived as weakness. If 80% of your income comes from a contract, your company can deal very badly if the agreement fails.
Stresses that your company is likely to forge strategic alliances and / or winning big contracts and will use this ability to diversify your customer base.