Business Plans – Top 10 most common mistakesTuesday, August 17, 2010 9:15
As you can imagine, I see a lot of business plans and so does any Investor. While many are good, most are very poor indeed.
Here’s my top ten of most common mistakes:
- Typos and spellings – it sounds small, but it is a killer. Now days there is just no excuse. My own spelling is atrocious, but I use a spell checker all the time. Use a spell checker, proof-read your work, or get a friend to proof-read it. Sloppiness in producing the plan will indicate sloppiness in your business.
- Poor structure – again no excuse. There are templates and examples around, we ourselves run business plan workshops and there’s software that will structure it for you.
- Executive Summary – people get confused as to what that is. It’s simply a short, punchy, straight-to-the-point summary of all else in the plan. About 2 pages, that is interesting enough and factual enough to almost stand-alone. After reading it, you should want to reach for the phone to contact the author, or at least feel you want to read more in the main plan. Although at the front, it’s the last section to be done.
- No contact details on the cover page. Someone reading the plan shouldn’t have to hunt through it for contact details – put them clearly on the cover.
- Over hyped – expressions such as “fantastic”, “unique”, “incredible” are meaningless and overhyping your product or service shows naivety. This is closely coupled to the next point…
- Lack of evidence – if you state a market figure, or statistic, try and show where it came from. It gains credibility. Do real market research; don’t just ask friends and family (they don’t count).
- No effort made to sell the product/service – the proof of the concept comes when you get sales. There are many, many, good ideas around, but not all of them are commercial. Will customers actually give you their cash for your product? Get out there and make some sales, show it will be bought.
- Not using Appendix’s – cluttering up the plan with pages of market statistics is not conducive to having it read. No one will struggle through a badly organised plan, just mention the facts and refer to the full information in the relevant appendix.
- No detail to the sales and marketing plan – it’s as though you think that the product/service will sell itself – it won’t. This is often the worse part of the plans we see.
- Unbelievable and incomplete financials – We’ve all seen the “hockey-stick” projections, where in the first year the revenues are minimal, but then by golly they shoot up at an incredible rate. Having unrealistic numbers, or incomplete numbers, or contradicting numbers are all plan killers.
You will spend a lot of time writing a plan, whether it is an operational plan to grow your business, or perhaps to get funding, you may as well produce a good professional plan.
There is software that will help with this – see our review of business plan help, or come to our business plan workshop (my bit of marketing!) But why reinvent the wheel, if your business is important spend the few pounds and save time by doing it right first time.