If you are looking for advice on how to write a business plan, then you will find endless resources. However, if you are looking for not what to do, then you will find yourself at a dead end. With this in mind, we have compiled a list for you of what NOT to do.
The first mistake many people make is putting it off. Don’t wait to write a plan until you absolutely have to. Too many people make business plans only when they have no choice in the matter. Unless the bank or the investors want a plan, there is no plan.
Don’t wait to write your plan until you think you’ll have enough time. It’s no good saying, “There’s not enough time for a plan,” or, “I can’t plan. I’m too busy getting things done.”
Also read: 10 Marketing Strategies Rooted in Human Psychology
The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.
Ignoring Your Cash Flow
Ignoring your cash flow is a sure way to send your business into a downward spiral before it’s had the chance to take off. Cash flow is more important than sales, profits, or anything else in the business plan, but most people think in terms of profits instead of cash.
When you and your friends imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits might be. We are trained to think of business as sales minus costs and expenses, which equals profits.
Unfortunately, we don’t spend the profits in a business – we spend cash. So understanding your cash flow is critical. If you have only one table in your business plan, make it the cash flow table.
Your Ideas
Plans don’t sell new business ideas to investors; people do. The plan, though necessary, is only a way to present information. Investors invest in people, not ideas.
Don’t overestimate the importance of the idea, particularly the uniqueness of the idea. You don’t need a great idea to start a business; you need time, money, perseverance, and common sense.
Very few successful businesses are based entirely on new ideas. A new idea is much harder to sell than an existing one because people don’t understand a new idea and are often unsure if it will work.
Don’t Hide Behind Your Fears
Doing your business plan isn’t as hard as you think. You don’t have to write a doctoral thesis or a novel. There is a huge array of good business books and resources available through government initiatives and specialized software that can help you through the process.
Make a Solid Plan – Don’t Waffle
Leave out vague references and the meaningless babble of business phrases (such as ‘being the best’) because they are simply hype. Remember that the objective of a business plan is its results, and to achieve results you need tracking and follow-up.
You need specific dates, management responsibilities, budgets, and milestones; you can follow them up. No matter how well thought out or brilliantly presented, your plan means nothing unless it produces results.
One Size Fits All
Tailor your business plan to its real business purpose. Business plans can be different things, though they are often just sales documents to sell an idea for a new business.
They can also be detailed action plans, financial plans, marketing plans, and even personnel plans. They can be used to start a business, or just run a business better.
Also read: Do You Plan To Succeed
Have Realistic Priorities
Remember, strategy is the focus. A priority list with 3 or 4 items is the focus. A priority list with 20 items is something else, certainly not strategic, and rarely effective. The more items on the list, the less importance of each.
Realistic Growth Projections
Have projections that are conservative so you can defend them. When in doubt, be less optimistic.
