8 business plan mistakes to avoid

It is difficult to get financing from a business plan, even a very good business plan. You can have a much better chance of raising capital by avoiding eight common business plan mistakes.

Your business plan may be the first thing investors see, and it’s important that your business plan is professionally and excellently written. Investors see thousands of business plans each year, and less than 1% are funded. You will greatly improve your chances of obtaining funds if you avoid these mistakes.

1. Errors in the general content

A well-written business plan finds the solutions to problems that customers are looking for and will pay money to solve. The plan does not need superlatives to say that it is great. If it’s great, readers will come to that conclusion. Also, make sure your plan presents a focused strategy to solve just one problem in your target market.

2. Say “No competition”

Every business has competition, whether direct or indirect. A competitor is anyone else who is trying to sell to the same target market. His plan should show how he is different from the competition and demonstrate that he is stronger in the market.

3. Too long and technical

Your plan should convey your business idea concisely. Any detail that you think is important can be included in an appendix. Also, your plan should not be too technical or scientific. Keep it simple.

4. Bad Organization

There is a logical way business plans should be put together, and each section should flow logically into the next section. You can find hundreds of resources that tell you what the basic sections of a business plan should be, and you or any professional you hire should follow this advice.

5. Incomplete or Inaccurate Financial Statements

You must use the appropriate terminology to describe the financial situation of your company. The financial statements must contain sufficient detail to fully support your significant assumptions.

6. Unreasonable financial projections

All figures in your financial projections must be reasonable and similar to the financial projections of other companies in your industry. Your financial statements must include income statements, balance sheets, and cash flow statements, all of which must be prepared in accordance with GAAP.

7. Typing errors

You must use proper spelling and grammar and cannot be redundant. Make sure your plan is attractive, interesting, easy to read, and professional looking.

8. Time errors

Have your plan in final form well in advance of its presentation to investors. You may not have the 500+ hours required to write a business plan. Then you should hire a business consultant to write your plan. Make sure another objective person reads the plan carefully and gives you some feedback on its effectiveness before you show it to investors.