5 rookie business planning mistakes to avoid

5 Rookie Business Planning Mistakes to Avoid Every startup needs a sound business plan to set the ball of investment rolling.

However, the planning landscape is littered with pitfalls and beginner entrepreneurs are most likely to stumble over some of the common mistakes.

Following are five of the frequent, yet easily avoidable, blunders that can diminish the impact and value of a business plan: 1. Not defining things right at the start – A business plan has to make a strong impact right from the word go. The executive summary is the strongest weapon in your arsenal for grabbing the investors’ attention and getting them hooked on to the business proposal. Avoid long-winded stories and use the space to pitch yourself, the product and what the business will do in clear terms. The ultimate goal is to present your idea,

objectives, growth potential and funding needed in a concise and convincing manner.

2. Not getting the facts right – It goes without saying that the business plan should be backed by latest market data and research. You cannot afford to make vague or unrealistic assumptions. Some people even resort to copying outdated or irrelevant data from reports or the internet. However, savvy investors check the numbers against industry data before making an investment decision. Well-researched market statistics (such as market size, customer habits, motivations, past sales, etc) is what will give a solid base to the business plan.

3. Not laying out the finances: The ultimate goal of a business plan is to raise capital. Unfortunately, first-time entrepreneurs often end up glossing over the crucial subject of finances. The investors want a clear picture of everything right from the amount of funds needed and how/when it will be paid back to details such as product pricing, sales growth, profit potential, cash flow operating expenses, break-even points and everything in between. Charts, tables and other illustrations of projections and forecasts will convey a clear understanding of the finances and sway the investors in the right direction.

4. Wrong style of writing – It is very tempting to indulge in superlatives when writing a business plan. In fact, top consultants belie that most business plans are littered with “best”, “greatest”, “peerless”, “no risks at all” and so on. Even using too many business phrases can sound quite trite or even get confusing. What you actually need is simple, crisp, clear and specific writing. It should sound formal, confident and authoritative as you lay out the facts and expectations.

5. Sloppy presentation – The business plan not only has to read well but also look good. Think about it – can you afford to turn in loose sheets of paper in a minuscule font or without page numbers or no headings? A properly formatted and professionally printed document with margins,

labels, headings and page numbers will show that you have spent time and effort over the business plan and the outcome really matters to you.

Given the scope of mistakes messing your path, wouldn’t it be better to seek the professional help of a business plan consultant?