A business plan guide is a great place to start
when you are getting ready to write your first business plan. Perhaps
you have found a book about writing business plans, or are following a
template, but chances are, these materials will only focus on the steps
necessary to create your business plan and will fail to point out the
critical mistakes that most new business owners make. So let's ignore
the step-by-step tutorial for a moment and focus on the real world
mistakes you need to avoid.
1. Don't Put it Off.
Yes, writing a business plan can be a monumental chore. It's easy to
procrastinate while you focus on the more exciting processes of your
business. Many new business owners will wait until the day before their
scheduled meeting with the bank -- and then frantically try to write a
plan overnight. You can imagine the results.
Don't wait until you have more time. There will
never be more time. You need to clear your calendar for a week and make
your business plan a top priority. Or if that isn't feasible, schedule
a certain period of time each day to work specifically on planning. No
doubt you have heard the old saying: "If you fail to plan, you are
planning to fail".
2. Don't Confuse Profit With Cash
Flow.
Unless you have an accounting background, you are very likely to define
the success of your business in terms of profits. A simple definition
of Profit would be Sales minus Expenses equals Profit. But in the
business world, profits do not equate to cash. Your profit formula does
not take into account the amount of cash you have tied up in production
costs for products that have not yet sold, or the customers who still
owe you money for sales that have already been made. Your business can
look quite "profitable" while your bank account is over-drawn.
Make sure your business plan includes a table that
addresses cash flow. Ideally, you should detail the monthly cash flow
for the first two years of the business and annually thereafter.
3. Don't Fall in Love With Your Idea.
Too many business plans blabber on for pages
about the "newness" and "uniqueness" of the idea. But the truth is,
investors want to invest in people, not ideas. It is only the people
who can execute the systems necessary to bring the idea to life.
Instead of waxing poetically about your business
idea, focus your energy, and your reader's eyes, on the ways you plan
to implement this great business idea.
4. Don't Succumb to Fear and Dread.
If you have never written a business plan, the process may loom like
Mount Everest. But, like most new challenges, writing a business plan
isn't as hard as you have imagined it to be. You aren't writing a
doctoral thesis or the next great novel. If you have invested in a
business plan guide, use it. You can easily find helpful resources such
as books, software programs and templates. Remember, you eat an
elephant one bite at a time, so start chewing.
5. Don't Over Sell.
Skip the vague and meaningless business phrases such as "best ever",
"highest quality" and "unsurpassed customer service". You will lose
your reader's interest and respect if you engage in hyperbole that
isn't supported by measurable facts. Remember that the objective of a
plan is its results, which require tracking and follow up. Focus your
goals on specific dates, management responsibilities, budgets, and
measurable milestones. Think fewer words and more numbers.
6. Don't Engage in One-Size-Fits-All
Business plans can have many different purposes and they should be
written to reflect the specific purpose at hand. You may be using your
plan to start a business, or just run a business better. Your purpose
may be simply to sell an idea for a new business to one particular
business partner. Your plan may be intended to secure a small business
loan, or it may be needed to secure millions of dollars of venture
capital. Each of these purposes would require different information,
presented in different ways to meet the needs of different readers.
Keep a picture of your intended reader firmly in your mind and your
business plan will stay focused as well.
7. Take Off the Rose Colored Glasses
Optimism is a wonderful resource. Without it, a business owner would
find it difficult to summon the energy necessary to launch a new
venture. However, this is not the time to engage in unbridled
projections. If your company's growth chart is based on an "industry
average" of 15% annual growth, you should certainly be prepared to
prove that assumption. When in doubt, be less optimistic.
By using a good business plan
guide, and avoiding these common mistakes, you can prepare a
plan that almost guarantees your business success. Good luck!
Article Source: http://www.articlesbase.com/small-business-
articles/business-plan-guide-7-mistakes-to-avoid-when-writing-
a-business-plan-905870.html
About the Author
Barb Dearing is a writer specializing in topics
that relate to new business owners. She recommends a free 9-Step
Business Plan Guide that can be found at:
http://www.business-plan-guide.com
|
