3 Common Mistakes When Writing a Business Plan
When we set out to launch a new business, there are many tips on how to write a great business plan, but less information is available around the obvious, common mistakes to avoid. As a professional business plan writer for the past decade, a lot of business plan drafts that pass my desk every month written by business owners, where many share the same common mistakes. Here in this post I want to breakdown the most common mistakes business owners make when writing a business plan, and how to fix them.
COMMON MISTAKE 1: Too Vague
A vague business plan is a weak business plan. For example, if opening a start-up daycare, you don’t just say “We will offer daycare services in Toronto.” Rather, your childcare centre will emphasize natural “Montessori-type” learning, while offering an excellent in-house healthy food program for infants, toddlers and preschoolers aged from 3 months to 5 years.
This must extend to all areas of your plan, from your staffing plan, to marketing budget and channels to implementation schedule. Specifics are your friend. This is most important in the financials section in your detailed breakdown of costs, break-even analysis, and sales projections and detailed assumptions behind your numbers.
For example:
“$500K in Year 1” (BAD)
“Projected to reach 50% of SME benchmarked average annual revenues (as per Industry Canada) in Year 1, or $460,000.” (BETTER)
Details give life to your project. They demonstrate that you are capable of putting together a concrete, real world simulation of how you will plan your business over the upcoming years. Details are what sets you yourself apart from competition and provide lenders and investors sufficient information to dig into and analyse as a serious investment proposal.
COMMON MISTAKE 2: Too Many Moving Parts
A second common mistake I often see is the error of stuffing too many moving parts into your business plan. Imagine you want to do it all: open 10 locations across Canada, plus set-up up a charity organisation, plus purchase some real estate etc etc. The biggest mistake is to try and cram everything into a business plan, as it’s just too confusing for the reader. Better to 100% focus on the first step, and revolve the plan only around that. A business plan has a clear objective - whether to raise funding or get a specific license - so write the plan around that clear objective in order to maximize your chances of success.
COMMON MISTAKE 3: Being Unrealistic
Every business plan is based on a series of assumptions, and the biggest mistake is to make “pie in the sky” assumptions around your business that are unrealistic. Better to ground your numbers in real world figures, whether it’s benchmarking against industry averages or based off the performance of a similar business in your sector. Substantiate every assumption that you make and justify the sales to make an accurate prediction. This brings in the importance of connecting all areas of the plan.
Final Thoughts
In most cases, research is the key to success – and once that is done with, you need to put it all on paper. If you have doubts about your business writing skills, you might want to opt to hire for professional business plan writing services like we provide. We know precisely the do’s and don't’s to ensure you have a professional plan your hands that maximise your chances for success.