Every startup needs a good business plan. In writing your business plan, you create a road map to follow as you begin to launch your business. In addition to this, the process of writing a business plan forces you to focus on the most important considerations of launching a new business and to really hammer out important details. Finally, any potential investors will want to see your business plan as proof that your business has the potential to be profitable.
Unfortunately, many business plans are simply unhelpful. This is usually because the people responsible for writing them have made one or more of the following mistakes.
You’ve Formatted Your Business Plan Poorly
Presenting a sloppily written business plan is like coming to a job interview in a stained t-shirt. Your talents and ideas will take a backseat to the poor first impression that you’ve left. Not only that, a poorly formatted business plan is simply difficult to read. Here are some structure and formatting issues that can be particularly frustrating:
- Missing or inaccurate table of contents
- Graphs and other visuals that don’t have explanatory captions and headings
- Use of technical jargon or abbreviations without any documentation
- Fonts that are stylish but unreadable
- Walls of texts instead of proper paragraphs and white space
- Missing page numbers
- Inconsistent margins
Your Plan is Unclear
This is not a summary document or an overview. Your business plan needs to be very detailed. It should have specific numbers by way of financial predictions, details about your products and services, and other very specific information.
If you are concerned that revealing this information could create a risk for intellectual property theft, there are ways around this. For example, you could present potential investors and stakeholders with a summary. Then, require them to sign a non-disclosure agreement before you give them access to the rest of your document.
Your Business Plan is Unrealistic
Every business plan contains assumptions. That’s the nature of writing a plan for something that either doesn’t exist yet or is in its earliest stages. Ideally, those assumptions are reasonable and based on diligent research. Poorly written business plans base assumptions on wishful thinking. One way to ensure that your business plan contains realistic assumptions is to conduct an analysis of your industry. If you base your projections, pricing information, and potential profitability on existing industry benchmarks, chances are you will be off to a good start.
If you are concerned that your detail will make your business plan dull and uninspiring, consider using professional copywriting services from a company like BeGraded. A seasoned writer will be able to combine storytelling with data to ensure your plan is readable.
You Create Red Flags
Be careful that your business plan doesn’t read like a get-rich-quick scheme. If your business plan claims that your startup is a risk-free venture that is a sure thing, investors and others will be put-off.
They’d be right to be wary. There is no startup that is a sure thing. If your business plan doesn’t make note of potential risks and roadblocks, that’s problematic. This indicates to investors that you are out of touch with reality, and haven’t properly researched things. Instead, outline any potential barriers you might face in launching your business. Then, detail how you will solve these issues.
The Plan is Incomplete
A seasoned investor is going to open your business plan, and immediately begin looking for very specific information. They’ll want to know about your team and their qualifications, your products, and services, who your competitors are, where you plan to sell your products, etc. If that information isn’t there, they are going to have questions.
Actually, in the best circumstances, they’ll have questions. If they’re frustrated enough by what’s missing, they may simply walk away.
Before you write your business plan, take the time to educate yourself a bit. Consider using a template, like the one provided by the small business administration. Even if you don’t follow it exactly, you can use it as a bit of a checklist to ensure you have included all relevant information.
Your Provide Too Much or Too Little Detail
The television show Shark Tank involves entrepreneurs presenting their business plans to a panel of famous venture capitalists and founders. If you watch the show, you’ll notice that each investor has their own approach to evaluating each business idea. Some tend to focus on sales and marketing, others want to dig into the tech side of things. Point being, they all different needs with regard to the type of information they seek as well as the level of detail.
It’s important that your business plan doesn’t overwhelm people with detail that isn’t relevant to them. On the other hand, you don’t want to keep information from an investor who is interested in that level of detail.
One thing that you can do is create an appendix to be added to the end of your business plan. This way, you can keep things at a high-level for most investors. Then, you can add additional documentation that digs into deeper detail for those who are interested.
Your business plan is one of the most important documents you will ever create. Take the time you need to ensure that it provides potential investors with the information they need, acts as a guide for you and your team, and shows that you have put in the appropriate research and effort.
Author Nicole Garrison
Nicole Garrison works as a writer, contributor, and content strategist who works at a variety of publications and platforms, including Subjecto. In addition to this, she has also launched her own blog, LiveInspiredMagazine. Nicole believes the key to being an effective writer is to always conduct proper research. When she’s not busy writing, Nicole enjoys long-distance running and beekeeping.
Statements of the author and the interviewee do not necessarily represent the editors and the publisher opinion again.