Five Common Mistakes to Avoid When
Preparing a Business Plan...
1. Underestimating the importance
of the first 90 seconds.
Readers of business
plans are busy people, often poring through hundreds,
or even thousands, of plans every year. Unless your plan has
immediate, aesthetic attraction and contains an organization
scheme, which calibrates the reader and compels the turning
of pages, your plan may never be read, much less understood.
2. Permitting inaccuracies, inconsistencies
or lack of objectivity.
You must pray to your lucky
star that, if someone is actually reading your plan, that
person is focusing
on content. Errors or inaccuracies (however minor), inconsistencies
(however immaterial) and non-objectivity (however innocent),
will conspire to distract the reader and create a negative
bias, from which your plan may not fully recover.
3. Failing to demonstrate sustainable,
competitive advantage.
The
reader is keenly interested in whether a market for your
product or service exists, and if so, whether you are capable
of exploiting long-term advantages over the competitors currently
occupying that market space. Do not succumb to the temptation
to underestimate your competitors, overestimate your strengths
or rely on a lower-than-market pricing strategy, to claim
sustainable, competitive advantage.
4. Underestimating the importance
of the management team.
Many investors feel that
a great management team can easily make a mediocre idea successful,
but that a great idea rarely survives a mediocre management
team. Help erase any potential doubts, by actively promoting
your team and key advisors, articulating strategic objectives
and an implementation
plan, and providing a critical risk assessment and related
plan for dealing with contingent events.
5. Failing to demonstrate revenue
growth and profitability.
Whether it's the new or
old economy, it's important to remember: top line growth is
great... but, bottom line success
is essential. Your plan will not survive scrutiny, unless
you demonstrate that it is based on credible financial assumptions,
that the quantitative sections reconcile with the qualitative
sections, and that financial projections are consistent with
generally accepted accounting principles.
Business Confident
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