The chances of a business surviving and succeeding are more when it has a well-written and well-researched business plan that can guide in every step of business process. But, unfortunately, many small businesses don’t realize the importance of having a well-written business plan.
This article focuses on common mistakes that small business owners make when writing a business plan and how they can be avoided.
No proper research
The purpose of writing a business plan is to include all the necessary things that are required for your business process. For which, you need to do proper research to get adequate and accurate information that will validate your business plan. Before you start drafting your business plan, think about all the critical factors that should be included in the plan, make a note of them and accordingly structure your business plan.
Never write a business plan that has incomplete information, because it may lead to failure of your business. A business plan should have clear and detailed information about your business and should cover all the areas including finance, administration, marketing, operations, accounting, etc.
Overestimation of revenues
While framing a business plan, see the real market for your products/services and the potential growth of sales and the revenues thereof. This is significant, as any overestimate would lead to loss of investment.
Look out for actual user experience and feedback for other products/services, if any. If there are none, it is sensible to keep the revenue expectations at modest levels to start with.
Detailed business plan
While it is important to detail the diverse aspects of the plan, you should ensure not to include trivial details which are tacit in course of business. If the information furnished by the plan is not straight forward and definite, later it becomes hard to implement the same. Such plans make business unsuccessful.
Make a realistic estimate of competitors and potential competitors. Use relevant statistics including demographics, income-expenditure, inflation, industry and others that are necessary to get a clear picture of the competitors, present and potential.
No proper hiring
Clearly define in the business plan the number of professionals you will hire for each department. You need to hire professionals who have expertise, knowledge and experience to make the enterprise a success. Right attitude, good leadership qualities, personal integrity, ability to adjust to change and new circumstances are some of the qualities that a professional should poses. So, make it clear in the business plan about these attributes that you are looking for in a professional.
Superlatives and hype
Presenting the business with a hype without taking into account the ground reality is another mistake small business owners generally make. Your business may have reasonable turnover and growth, overtime. Be realistic while presenting data of your business.
Avoiding these mistakes, would lead you to a successful enterprise over a time span. It depends upon your ingenuity to grasp business trends and the ability to foresee the opportunities and threats to your business.