Writing your first business plan can seem like a daunting task. And there are many areas that can trip you up if you approach it unprepared. The good news is that each successive business plan you write will become easier, as you develop expertise. But for now, just know there are certain mistakes to watch out for.
4 Common Mistakes When You Write a Business Plan (I was guilty of 3 of them!)
Check out some of the most common errors I see here:
- Skipping a section you don’t understand
When you hit a section of your business plan that’s hard to understand, the temptation is to try to ballpark it. After all, it’s hard to to force a pause to figure out the answer to a stubborn question. But get past the temptation to skip it — learn from my personal mistakes of the past. Honing your business plan is beneficial in far more ways than just securing funding. Your business plan will help you plan, project, and solidify your strategy. It’s worth the time to do it right.
- Not asking for help
Entrepreneurs are great at … well, everything. So it’s hard to consult a professional for something you could potentially figure out yourself. But there’s a price to everything – even not hiring a pro. Consider and calculate the time it would take you to stop and learn something new, when so many other areas of your startup need attention.
- Not Treating the Financials Properly
The income statement, cash flow projection, and balance sheet are some of the main numbers investors want to see. So don’t make the mistake of glossing over this section, or plugging in arbitrary numbers, just to get something down on paper.
- Ignoring Glaring Issues Revealed by Your Business Plan
Over the course of creating a business plan, a lot of entrepreneurs will become aware of some issue with their idea. Creating a business plan often reveals problem areas. Maybe the market is over-saturated or the price point will not bring a profit, or the idea isn’t solidified. When you uncover a problem, do NOT cover it up and move on. One of the primary purposes of your business plan is to identify problems, and address them before attempting to put a faulty plan into action.