Designing a business plan is the key point for a business to have a proper and orderly development that leads to success, however it is very common to make mistakes in its development, because in most cases we do not plan focused on reality but in the depths of our desires; that’s why we present below the mistakes you should avoid when making your business plan .
A business plan will offer you more than a guide to know in which direction to guide your ideas and strategies, if you know how to elaborate one, already with business knowledge and above all experiences of setting up and developing a company.
Ideas to develop a good business plan
It is really simple to say “I already have my business plan”, however, it is not about writing how you intend to work on the growth of your company, it is about strumming step by step the development of your business, that way you will be able to fulfill your goals and objectives more quickly; Here are some tips to give you an idea of how to design an appropriate business plan.
The formal structure does not work for the real world
The structure of a traditional business plan is commonly made up of 8 sections:
- Executive Summary
- Company summary
- Products and services
- Summary of the market analysis
- Summary of the strategy and implementation
- Administrative summary
- Financial plan
Regularly each of these sections usually have an extension of 5 to 10 pages, so together they form a rather extensive business plan that instead of giving a direct idea of the business idea, it makes a heavy and tedious reading that confuses the objectives of the company in training.
So if you want to present your business plan to a future partner or investor, think about making a better summary of the information, shorter, concrete and direct that allows your readers to have a clear idea of what you want to achieve and also convince yourself of your project
Remember that currently the attention of people decreases, so the information they need to read must be short, direct and dynamic.
Remember that a business plan is not static
A recurrent problem that entrepreneurs have when preparing a business plan is to believe that everything written in that document will be fixed and will have to be carried out literally without any change; this is a resounding error, since on the fly you will have to change things, a business plan is a guide, not a regulation.
On many occasions, people refuse to modify a business plan, due to the time they spent preparing it, maybe it took 4 days to develop a marketing strategy, however at the time of testing it does not work; It is in these cases, that modifications must be applied to prove other points of view, making mistakes you will have even greater knowledge to reflect in your business plan.
Another type of situations in which you will be forced to modify your business plan is when you present your project to investors and future partners, each one will see it with a different point of view; so you will have to modify it according to the profile or once they have given you a feedback on the project you want to make.
Do not close yourself to changes, a good business plan is open to changes in order to grow; This is a recommendation of the mistakes you should avoid when making your business plan.
It reflects reality in your business plan
It is a fact that there is a fundamental part of a business plan, and that is the financial plan. This is an extremely important area that needs special attention and understanding, before fully developing the business plan; since you will not have months or years to check if the business you want to start is viable in the financial aspect.
When planning a financial projection you will be making plans for 6 months based on complete fantasy; that even if you call real data, they are still part of a dream or a fantasy; and while quantities mean something important, they will not be worth anything until it really happens.
This aspect is of utmost importance, since most of the entrepreneurs tend to consider the value of their company according to the economic projections they have of their companies; what is a clear sample of inexperience.
Do not make the mistake of telling your investors and partners, the earnings you expect to have per year; Try to be as realistic as you can and not equal the value of your brand to that of your niche.
Do not use your business plan to raise capital
When you have a business idea that you want to develop, what you want is to raise capital as soon as possible to start the business, however to places that you can apply for loans and investment as family, friends, angel investors, crowfunding or banking institutions.
However, only one of these options you have will completely read your business plan, and in fact, it will be the least likely opportunity to obtain a loan; We are talking about banking institutions. Even if you have a clean credit history and the real possibility of obtaining a loan to start a business or a line of credit with personal guarantee; It is the place you should not apply for a loan through your business plan.
Having and developing your ideas about your business in writing is quite important, and helps to study in depth the weak points of the structure of your business, as well as unify all the parts that help the formation of the company. But going with a traditional business plan is an unnecessary move in the process of attracting investment for a startup.
So for capital to be not one of the mistakes you should avoid when making a business plan , we recommend that you create a 10-page writing that is much more concise, direct and visual about your business plan; that way you can get more revenue.
Keep in mind the audience you are going to direct the business plan to
Developing a business plan in a general way for everyone, will make your business plan look irrelevant and does not meet the expectations of everyone to whom you will show your document. A good business plan must be written and directed to a specific type of audience; In this way, you can clarify the doubts and questions of each one, from the very elaboration of the business plan.
We recommend that at the time of writing your ideas, be as clear as possible from the beginning. Make a bank key questions that the person to whom you are writing the business plan will possibly make you; and with these questions in mind, develop the structure of your business plan.
Do not waste so much time on the little details of your business plan
Nobody like you, knows 100% your business, and it is almost a fact that at the moment you present your business plan, you will want to talk about everything you know, this will be a point in your favor at the moment when the reader present certain doubts. This is an important way to focus attention on the points that you consider important.
So to avoid wasting time developing each of the points of your business plan, you can answer the key questions first and then determine which sections of your business plan you need to include according to the type of reader you want to reach; For example, if you plan to share your information with your work team, then you will not have to include many details about the product they want to sell, as they should already be familiar with the subject.
We recommend that you remove all the excess of words that do not offer anything to the readers and the best way to realize, what is of more in your business plan is that someone read it before you finish it, in that way you will realize what you need or what is too much.
Do not copy and paste all the information
Most of the entrepreneurs who write their business plan are dedicated to copy and paste the general information about the market in which their project will be developed; information that is easy to find on the internet; However, this is a great disappointment because you are not really reflecting all the knowledge that you say about the subject, besides that the information is quite general and not enraged in your project.
So we recommend that you analyze carefully the market in which you want to develop so you can identify exactly what is relevant to your business, for example, in regards to technology you can focus on talking about software that is quite useful for your business .
Explain your finances very well
Most entrepreneurs have problems to define exactly how the finances of their business will work, perhaps because it is seen as something distant and independent of which one can not have total management. However, this data should not necessarily be something complex, just as the other parties that make up your business plan, you must tell a story.
What you should do is explain the assumptions you have about your finances, explain in detail why you think you will get those results or on what aspects you rely on to reach those results.
You need to explain what comes next
In almost all business plans it is common to observe that each of the parties that comprise it are focused on meeting a specific objective, which together, have the goal of launching almost immediately the business. But nowhere in this document is it usually talked about the plans that follow after starting the company.
Just as it is important to define all the context that surrounds your business, such as identifying the type of prospects to which it is addressed, you must also define the long and medium term objectives. It is basic to have all this information in a business plan, it is what is expected about the development of the idea.
It is recommended that you spend time reflecting on the key points of your project, how you visualize them at the moment when you start and how you visualize them in a certain time; You can work on these points with your work team, that way you can develop joint strategies that allow you to reach the goals that are set.
For an investor, observing the development of these points is very important, and represents a greater formality and accounts for the high level of your project, which is not only seen as a new business, but as the development of a successful business in the future .
Finally, as we mentioned in several points of this article, a business plan is not a static text, since it must be dynamic enough to be able to adapt to changes and the context in which it is developed, as well as to allow the nutrition of the feedback of your collaborators and investors.
But whatever it is, the way in which you develop your business plan, do not forget that you must have certain strengths on which you should base, these should only function as pillars of the entire development of the business plan.