By Lauren Baldwin, Editor, Bizcrowd
To build a successful business, having a clear mission and specific goals is vital. The best way to do this is to write a thorough business plan setting out how exactly you’re going to turn your business dreams into reality.
To help you get it right, we’ve come up with ten things not to do when writing your business plan.
1. Don’t be conservative
Most business owners will put conservative figures in their business plan, but state that they plan to do much better than this. Crowdcube.com says that it is important to convey this air of ‘greater things to come’ but you should aim to position your numbers as realistic. You need to be able to prove that you have paid due care and attention to not only the potential for business, but also the reality of starting a new business from scratch.
2. Don’t say that you have no competition
There is always competition. Even if your product or service is new to the market, consumers always have alternative solutions for solving the problem or issue you’ve solved. Understanding your market is vital. What are your customers using right now, and why would they use your solution instead?
3. Don’t get bogged down in the detail
If you must provide minute levels of detail to support your plan, do so in the appendix. Entrepreneur.com recommends following a structure of Exec Summary, followed by Main Body, followed by Appendices, then anyone reading the plan can easily access the level of detail that they want.
4. Dont over estimate the size of your market
It may seem like a good idea to be able to quote that you only need 0.0001% of the market to turn a profit, but in all reality, business case numbers are a ‘guess’ of what will happen. Crowdcube.com suggests starting from the bottom up — how will you sell you first five products, and then how will you expand out on this customer base to grow your business?
5. Don’t confuse your Mission, Vision and Objective statements
They may seem the same at first glance, but they reflect different rationales. 4entrepreneur explains the differences:
Your mission statement is your underlying operating philosophy e.g. to provide a reliable and cost effective service for small businesses.
Your vision statement looks into the future e.g. to become the market leader for the supply of your service in the south of England.
Your objective statements represent definitive goals for different purposes with the company e.g. sales, services, finance, logistics etc.
6. Don’t include your CV
Your business case is about the business you intend to run, not the business you have run. Crowdcube.com recommends writing a solid business case and including a link to a fully completed LinkedIn profile, along with recommendations. If an investor is interested in the business case, they will click through and check you out.
7. Don’t include typos
You only get one chance to make a first impression, so make sure that you have triple checked the accuracy of your content to avoid any questions arising around your capabilities to complete the most basic of tasks.
8. Don’t scrimp on the research
smallbusinessbc.ca says that you must make sure all your research is up to date and factually correct. A good investor will either a) already know what you’re telling them or b) have access to the information you have provided, so make sure that it can all be substantiated so that you won’t be discredited.
9. Don’t start at the start
Forbes.com says that every good business plan starts with an executive summary — usually no more than two pages. Think of it as your ‘elevator pitch’ and remember that some investors may not read past the first few lines, so be sure to detail the value proposition of your business. But in order to write the executive summary you need to know the detail — so write your business plan and then complete the summary last.
10. Don’t go it alone
Make use of the assets around you, maybe your employees, maybe a business mentor. smallbusinessbc.ca advises that another set of eyes will make your business plan look more professional and make sure that it reads correctly.