One cannot simply start a business and expect that it will suddenly become a prolific, money-making machine. It takes a substantial amount of planning to put things in perspective and to set in motion a chain of events and activities which will propel you on the market. However, not all plans are fool-proof, and very often some of them can go awry. Identify and correcting such flaws in your business plan is crucial.
The grammar behind it
Yes, even a poorly written plan that lacks either proper punctuation, spelling or style can send things down the drain. Once you put everything on paper, have someone with strong “English teacher” skills to put everything in order and in accordance with grammar. Before you show your elaborated strategy to bankers and investors, this is compulsory.
When you do the writing right, next up is presentation. It has to be immaculate, because nothing deters investors better than inconsistent margins, missing page numbers, misinforming charts, terminology without definition, etc. Bear in mind that even though it might take you months to develop and prepare your plan, most venture capitalists won’t give you more than 10 minutes to present everything before they make the final decision.
Most of them simply don’t have all the aspects of business covered. Customers, products/services, operation, management, monitoring, competition, marketing, sales, industry trends, etc. – you simply must include all of them in your entrepreneurial package so that the investors can see the bigger picture. Finally, a detailed financial projection going out at least
three years is crucial to determine whether the entire plan is worth pursuing at all.
This shouldn’t be a poem, or something artsy, nor should it be a cryptic text. The primary thing is to make the entire plan understandable for people of all educational backgrounds. If someone reasonably intelligent cannot fully comprehend your ambition written on paper, than simply rewrite it. However, such plans usually contain confidential material, so start off with your summary first and as third-party interest grows, so can you gradually reveal the
The plan is unrealistic
It is in the nature of every new business beginnings to dwell in assumptions, yet there should always be a hint of rationalization behind each and every one of them. Yes, we all want to succeed, but not knowing where such assumptions end and facts begin can bury the whole thing. The best thing to do is check every premise against benchmarks from either the same industry, a similar one or any other acceptable standard.
Lack of research
In order to make those assumptions into facts, it’s crucial to attain every iota of information that will help you establish your business – customer habits, motivation, fears, demands, position of competition, market size and overall trends. Statistics always help put things in perspective, so remember to go with numbers when you want to give the investors a frame of reference. Also, one immensely important aspect of any business is coinciding with the
law. It can be your downfall if you do not know the protocols, the rules and regulations of your country, so make sure to seek business legal advice before you fully embark on this journey.
Denying risks and competition
Every well-informed person knows that there is no such thing as a “no risk” business. There always were, are and will be risks. Always. That is why you need to understand them and evaluate them, because when you discuss them with your potential investors, you have to know how to minimize or mitigate them. As for the competition, stating that there is none is borderline stupid. Every successful company has them, both direct and indirect; so it’s important to
put an accent of your competitive advantages in the business plan.
You should have short-term and long-term goals, however do not focus entirely on describing how your plan will look like in each stage, but how you will progress from one to the other. What you present to your potential investors should be a “roadmap” or specific guidelines which contain strategic milestones that give everything real meaning and long-lasting future. Outline the major steps which will make you reach those milestones and just keep
pushing the envelope as you adapt to your surroundings and newly-formed trends. This mind-set will surely make investors eager to help you out.