A business plan is a bit of a paradox.
On the one hand, it must account for problems, foresee challenges, and respond to potential difficulties. When the moment comes to confront the inevitable struggles that even successful businesses encounter, the plan you crafted will be your lifeline.
At the same time, your business plan must also serve as a certain type of sales pitch. It is the story that you tell potential investors, partners, and, depending on your industry, clients. Of course, it is a very in-depth and honest sales pitch — but it is intended to convince and win people over, all the same.
Balancing these two distinct (and occasionally contradictory) purposes is one of the most challenging aspects of writing a good business plan. And it is one reason why business plans are often riddled with a weak link or two. In this article, we will explore a few of the most common errors that entrepreneurs make when crafting their business plans — and we will propose a few strategies that you can use to avoid these errors.
1. Inadequate planning. Many entrepreneurs are big-picture people with revolutionary ideas that hold the potential to change the world. Unfortunately, success in the business world depends upon a balance of big-picture idealism and small-picture pragmatism. Writing your business plan is the first test of your ability to strike this balance. If you are unable to do so, you will either struggle to find investors, or you will struggle to keep those investors happy once you have launched.
2. Excessive optimism. Confidence is another common (and important) trait in business owners that can sometimes lead to less-than-optimal situations. Being overly dependent on plan A is never smart — every business needs a plan B and even a plan C. That is not to say optimism is bad: a healthy dose of it can help sell your business plan, and it can also you power through tough times. But, as the old saying goes, all things in moderation.
3. Overlooking the competition. No business exists in a vacuum. And, even though your number one focus should always be on your business, you need to study the competition as well. This can help you understand what works and what doesn’t. It can also help you see which areas of the market are already saturated, and which products/services might still be lacking.
4. A lack of market research. As we mentioned above, researching the competition is important. Researching your potential customers is even more important. The more accurately you can identify your target audience, the easier it will be for your business to get off to an excellent start.
Are you still working on the business plan for your startup? Are you wondering how you can position yourself for a successful launch? We encourage you to visit Strat IQ Consulting online today to learn about our unique 90 Dynamic Launch coaching program — you owe it to yourself and to your business!