But there’s a big difference between an average business plan and a great one. Get it wrong and your business will be like a rudderless ship at sea. Get it right and you will have clear goals that your business will attain which set you up for a greater chance of success.
With that in mind, here are the 10 most common business plan mistakes, and how to fix them…
Although no two business plans are the same, there is a format for creating one, with each piece of information helping shape the big picture of the business and what it intends to achieve.
Too often, business operators fail to include all the information required, which is like completing a puzzle with gaping holes.
Without all the information, you cannot get a clear picture of what the business is, how it will look in the future, and more importantly, how it will get from where it is now to where you hope it will be.
Falling short on the financials
The financial elements are one of the hardest sections of a business plan to complete, but they are essential.
This section of the plan sets out the current numbers of the business, the projected earnings in the future, and the capital required to take a business to the next stage.
It’s a key component if you’re hoping to attract investors into the business or sell it, but also helps a business operator track exactly how their enterprise is performing in relation to their goals.
Poor market research
Most business operators appreciate that comprehensive market research is imperative during the start-up phase of any business, but importantly, it remains critical at every stage of the business journey.
This market research determines who your ideal customer is, the value proposition your business will offer to them, how you will market to those people, and any competition you have in that space.
It also helps define the vision and mission of your business.
Not knowing your competition
On that note, almost every business will have competitors. Finding your place in the market involves knowing exactly who that competition is, what they offer, and their strengths and weaknesses.
Defining this allows you to differentiate, helps you determine strategies to plug any market gaps, and ultimately sets you up for greater success.
Not accounting for your weaknesses
Make no mistake, every business and every business operator has weaknesses. It could be lack of skilled staff, lack of capital, lack of knowledge and the list goes on.
To overcome them, you need to know them and include them in your business plan so you can take action to address them.
When you understand your weaknesses and document them, you are protecting your business against possible threats.
A key component of any business plan is goal setting. These are the steps you plan to take to achieve your ultimate outcome.
But these goals must be clear. They must be specific, measurable, attainable, realistic, and timely (SMART).
If not, they are just idle wishes set down on paper.
Making a plan that’s too detailed
While your business plan should be complete and comprehensive, it should not waste time on unnecessary detail.
It should be clear and concise. And when it is, it will be a document that is easy to refer to and a key tool in your business.
If it’s too cumbersome, that plan becomes overwhelming and, quite simply, a very lengthy document likely to gather dust on a shelf.
To ensure your plan hits the mark, have it reviewed by an expert, or read by others within your business.
Failing to update your plan
A business plan is a living document that should help your business evolve over time. It needs to be updated as your business grows and changes. If not, it quickly becomes irrelevant and serves no purpose.
Ideally, your business plan should be updated at least once a year as part of your annual review and goal setting strategy.
Thinking one size fits all
As I mentioned earlier, although all business plans start with a similar template, each will be unique to the enterprise it serves.
There is no one-size fits all approach to business planning. The aim of the plan is to set out the current position of your business, what it hopes to be in the future, and how you intend to bridge the gap between where you are now and your planned destination.
Not making a plan at all
The biggest mistake a business owner can make is not to have a plan at all. Without one you have no clear destination for your business in mind, little chance at growth, and the business cannot reach its full potential.
It is a ship adrift at sea, without direction, without a map and without the ability to enjoy the successful voyage it deserves.
Ready to make or update your plan? I’m available to assist. See more of my tips on business planning here, or schedule a discovery call so we can get started on creating a comprehensive plan for your business.
Talk Strategy with Clive
With more than 30 years’ experience in mentoring small to medium-sized businesses around Australia. Clive works with company owners and their teams to grow their business and achieve goals through strategic coaching.