While large corporations get the most attention, small businesses employ 99.9% of the American workforce. Each year, entrepreneurs embark on new business ventures in hopes of forming the next great success.
Unfortunately, many of these new ventures are doomed to fail. This is largely due to the mistakes the founders make. If you’re hoping to start a business, you can set yourself up for success by learning and avoiding many of the common mistakes that others make.
Keep these five business plan mistakes in mind when creating the plan for your next venture.
1. Skipping Market Research
Doing market research is a long and drawn-out process when done correctly. This is probably why many people skip this crucial step. Do not make this mistake by assuming that a rough idea will be enough to base your entire business plan on.
Detailed research results and concrete data make it easier for you to make informed decisions. This makes your plan more precise and convincing to potential investors.
2. Guessing Costs for Your Budget
When creating business plans, business owners know they need to include money; they just don’t want to get into the gritty details of it. However, this is a potential trap. Do not rely on your personal knowledge or past experience.
Instead, get actual quotes from vendors. This gives you a clear picture of your overhead costs. It also reduces one of the most common reasons for failure, running out of money.
3. Being Overly Optimistic
It’s ok to be optimistic about your new business. Obviously, you want it to succeed. However, you shouldn’t be too optimistic about your long-term business goals. Allowing yourself to remain blind to common business risks will set you up for failure.
Identify market risks and your business’ shortcomings. Then devise ways to address these. This will better prepare your business for the roadblocks that stand between you and success.
4. Lack of Focus
A common problem with the majority of business plan documents is that they lack focus. They don’t have a clear definition of the product or service to be provided, the target market, or the market the business is in.
Without a clear definition, investors are left confused and wondering what the purpose of the business is. You won’t ignite potential investors’ interest in your start-up. This leads to a lack of funding.
5. Not Selecting the Right Tools
Writing up a business plan on your own when you’ve never created one can be a recipe for disaster in itself. You could leave out crucial sections.
Using the right tools, such as the OGSM framework by Arch Point Consulting, can help you prepare a professional and thorough business plan. It addresses everything from formatting to data. This ensures you have a complete and high-quality business plan that is sure to impress potential investors.
Avoid These Business Plan Mistakes
By avoiding these common business plan mistakes, you are setting yourself and your new venture up for success. Not only will it help you define its focus and purpose, but it will also help you attract higher-quality investors.
Set your new business up for success by reading more of our business-themed articles.