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The business plan mistakes entrepreneurs make

Ideas continue to be simply ideas if there is no effective way of turning them into successful businesses through consistent execution. Your startup’s future is in your own hands when we talk about funding, because you are the person responsible for the creation and presentation of your business plan to potential investors.

The competition is tough and you must be well prepared with killer business plan to attract skilled and ambitious employees, to draw the attention of investors, to increase your chances of receiving bank loan, and hopefully to win the funding that your startup deserves.

Your business plan should be professionally written, because it is a formal statement summarizing your startup’s goals and the ways these goals are expected to be executed. The business plan also consist information about the company, the teams and, of course, the product, so sloppy written business plan basically creates an image of a sloppy created business. Investors have seen exceptional amount of business plans and they know exactly what a successful one must include. Remember, nobody wants to invest in something sloppy!

Length problems

The length of the business plan is very important – it doesn’t have to be very long or too short. Around 15 pages is the best length for a typical business plan. The business plan has a pretty strict structure and it allows certain variations, but basically the information that needs to be included is touching the most important aspects of the company. Know your audience when you prepare your business plan. If you have just 5 minutes to present your business, it is ineffective to present very detailed business plan.

Don’t skip the mission

Include your mission, vision and main idea into the description of your company. This is the key element – to present your purpose of existence. Entrepreneurs often make the mistake to skip this part of the business plan and not to emphasize the importance of the idea behind their startup. Nobody wants to invest in a business which mission is unclear and even the founder doesn’t pay the right amount of attention to it.

Don’t be boring

Write your business plan in an engaging way. You don’t want your reader to get bored on page one and skip the rest of the plan. Startups are all about innovation and if your idea sounds boring, or worse – is boringly presented, you are more likely to miss your chances to attract investors.

Be realistic

Business plans have to be precise and to present accurate information. Here the numbers matter – don’t exaggerate the size of the market, don’t underestimate the competition or the size of the rate of return for the investors. Big numbers can work against you if they sound unrealistic.

Avoid confusion

If your plan is unclear and has many missing parts, it will sound incomplete and nobody wants to invest in something vague. Make sure that there are no missing parts in your business plan and that all the ideas and important aspects of your business are presented in a clear way. The business plan is created to present comprehensively your startup not to inflict confusion.

Unclear timeline

Your business plan must include clear execution timeline and detailed information about the way your business will grow in time along with the specific time goals. Unclear timelines ring a bell for unclear vision of the execution of the idea and it is a complete interest killer.

No long term goals

Including the expected from the near future only can be confusing to the potential investors. Don’t you have clear vision on the long-term future of your company? Investors aim to profit and the biggest profits come through growth. If you don’t have clear vision on the future goals of your startup, it can be problematic part of your business plan.

The risk factor

Business plans with no information about the possible risks which the company may face in the future is a huge red light and you must be able to include the accurate information of the potential technical, legal, market, even management risks which can occur with the time. Investors must hear about the risks because they have to know how calculated these risks are and to understand how you are able to face the possible challenges.

Every startup owner must work hard on creating the business plan for their business, because it is the most important presentation for the company. Take your time for writing the business plan, do your research and, if needed, hire competent person to help you with it. Poorly written business plan can cost you the bright future of your startup.

─ November 27, 2014