7 Mistakes People Make When Creating A Business Plan
Crafting an effective business plan is both an art and a science. You need to provide a general overview of your business but at the same time provide the minute details that support your overall business vision. So many people speed through using generic business-plan templates without giving enough thought to how their plan is being perceived by its audience or how their business plan can actually impede their business if done incorrectly. Here we list the 7 most common mistakes people make when making a business plan to give a checklist to make sure your business plan is in tip-top shape for its audience.
1. Copying a business plan from another business
Sure, there are shortcuts to crafting a great business plan, but simply copying and pasting from a business plan of a similar business is a big no-no. Copying a business plan can easily distract you from what is unique about your business, which runs the risk of hiding your actual advantage in your market.
2. Misrepresenting Strengths and Weaknesses
Some of the most critical information for your plan comes from how you characterize what makes your business strong over competitors and possible weaknesses. Some entrepreneurs feel tempted to fluff up their weaknesses until they no longer appear to be a weakness. The problem with this is that misrepresenting your weakness robs you of identifying the best way to actually overcome that weakness. Be honest about your business weakness in your plan, but also list and identify ways to turn your weaknesses into strengths.(Link)
3. Overlooking Competition
Especially new businesses tend to overlook or sugarcoat the threat of their competitors in their business plans. As business owners, it’s much easier to ignore the challenges posed by our competitors than it is to face them head on. Acknowledging your competitors in your plan gives you and your stakeholders the opportunity to identify ways you can beat them. Ignoring them puts you at risk of being blind-sided by them at some point in the future.
4. Being too vague about the target customer
There’s not much worse in business than trying to market and sell your products and services to the wrong customers. The only way to avoid this in the long term is to gather as much detailed information about your target customers as possible. For this reason you business plan should not only include demographic information about your target customer, but also psychographic information that gives details about their consumption tastes and behavior patterns.
5. Being Unrealistic
The point of a business plan is to give you and others involved in your business a good idea of what your business is and the opportunities it has in a particular market to be successful. It is useless to create a business plan that presents your business in a way that is unrealistic because making your plan unrealistic will not cause your business to have a greater likelihood of success.
6. Not Using (or Misusing) Visuals
Visuals give a pictorial view of your business ideas that convey your message more concisely than any amount of words. Charts and graphs convey information like paragraphs do not, allowing readers to get a fast idea of the important information they need to understand without overthinking things. It’s vital that you use visuals to support information presented in words, and not use visuals in an attempt to replace information written in words.
7. Not Explaining The Data
Most business plans present data to support claims or projections about a business opportunity. However, one common mistake people make is to think that listing a series of data is enough to convey the meaning of that data to your audience. It is important to explain what your readers are seeing in the data that you present. Explanation of your data doesn’t have to be lengthy, it simply needs to reduce the amount of work readers have to do to understand its meaning.
Creating an effective business plan is not easy, but learning from the common mistakes made by others can go a long way toward helping you make the best business plan possible for your business. The mistakes in this article are not the only ones to look out for, but avoiding them will help your business plan stand out from the rest. To increase your chances of success in writing an effective business plan, try the Business Plan King business plan maker, which makes it easy to apply the principles in this article.