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The biggest business planning blunders

The biggest business planning blunders

From what we see at The Business Plan Company, the majority of small and medium businesses don’t do any form of business planning. Usually, if they have ever done a business plan, it was to get finance or a licence, then it sat on the shelf and gathered dust.

When they are written, it's often a scramble by the owner or senior team member to put the plan together in a hurry. Unfortunately, for many small businesses, the process is often quite a haphazard and unprofessional.

There is no disputing that business plans play an essential role in the small business growth journey, as well as being essential tools in getting accreditations, investors and loans. Where utilised well, business plans can transform a small business from a trial-and-error business management style, to one of clarity and certainty. If your plan is being used for an application, it is going to be turned inside out, so you need to make sure it is accurate and a strong representation of your business.

With thousands of plans under our belt, here are the top business plan blunders we have seen.

1. Not knowing the audience

Before you start, make sure you know who it going to read it. Business plans for particular applications need to include specific information to enable the assessment of your application. That could be a bank employee, council or authority and often there are specific formats and templates that you need to follow, to make that easy for the assessor. Know what they want.

2. Too simple

Often business plans are developed by business owners who have just written what they know, from information off the top of their head, without any external research. In plans where there is research, it’s often from low-quality sources and not referenced. Take the time to dig deep and include market research; after all, part of the value of planning is to push you outside your current knowledge.

3. Sloppy formatting

Everything in the plan needs to be extremely tight, in order to present your business in the best possible light. That means consistent fonts, styles and sizes, no spelling mistakes and being concise and easy to read. As part of your business planning process, have someone else review the plan to check readability, spelling, grammar and formatting.

4. Assumptions not detailed

In order to build your business plans and create a vision for the future of your business, you will have to include assumptions. Your reader, will likely know nothing about your business, so everything needs to be explained very clearly. An external reviewer can quickly point out the areas that need editing and clarification before you finalise the plan.

5. Inconsistencies

In your business plan, you will tell a story about your business, so that story must be complete and consistent. As you write the plan, cross-check each section against each other so it matches. Missing or inconsistent information raises red flags with the reader, alerting them that you have not considered all factors.

6. Not realistic

We have seen all sorts of super ambitious business plans, with high growth and over-hyped projections. If you go too far away from what is the norm in your market, the whole plan can lose credibility very quickly. Use your past trading data and performance to justify your assumptions; if you are a new business, refer back to industry averages.

7. Not taking it seriously

Business planning is a useful exercise, whether you are doing it for an application or just for yourself. As with anything you want to do in business, it requires skills and knowledge to get the best outcome. A business plan — if you want it to mean anything — is not just a collection of regurgitated data and information cobbled together as an afterthought. If you are struggling, don’t have time, don’t know what to do or aren’t doing any planning at all, get help. There are professionals out there that write plans every day and can simplify the process, produce a significantly better product and increase your chances of the outcome you are seeking.

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The Business Plan Company

A team of specialist writers of business plans, grants and tenders for small and medium businesses as they start, grow, get finance or accreditations. Our team are all business owners themselves, so clients get real-life experience plus a thorough business plan.

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