Start small business

When any business is started the first step is to make a plan. Every business must have a one; the significance of business planning is extensively recognized by all businessmen. The process is a very valuable pursuit, generally the aims are written for a particular purpose, which are used to communicate an idea for achieving a certain goals, like securing funds. Therefore the arrangement must be customized with keeping the requirements of audience in mind.

Unfortunately, despite of the sheer importance, plans in starting a new business the vast majority of them are very badly composed. While drafting the big picture one should take care to avoid the common mistakes which are often made by the businessmen while writing their business plans:

1. Poorly written plan:

While framing a business plan the spelling, syntax, punctuation and mode are all important. After writing your business plan but before showing your plan to the investors or bankers you should check thoroughly each and every line of your business plan. When the plan is written you should use spell check, with the help of the spell check you can find the spelling and grammatical errors.

Style in which the business plan is presented is also equally important. Different entrepreneurs write their business plans in different styles. Your style should be positive, immaculate, convincing or formal. Different styles appeal to different investors. The style that you choose for your business plan it should be consistent throughout the plan.

2. The plan presentation is poor:

The other mistake that entrepreneurs generally make is that they do not give much attention on the presentation of their plan. An investor gets irritated with inconsistent borders, absent page numbers, no labels on charts, no headings on tables, or an absent table of contents. You should let someone else to proofread your plan before you present it before an investor or banker. Your plan must be well organized and well structured.

3. The plan is incomplete:

Every business has customers, products and services, procedures, marketing, a managerial team and competitors. At least, your plan must cover all these areas relating to your business. A complete plan must include a discussion of the industry and that too related to the trends in the industry, like if the market is a developing market or deteriorating market. Your plan must include detailed monetary forecasts regarding the business, the capital requirements of the business, working capital requirements, cash flow statement, income statements, annual balance sheets and calculations regarding the break even point etc. and that too for at least three years.

4. The plan is too vague:

The other mistake that entrepreneurs do is that they draft their business plans vaguely. If you are presenting the information vaguely because of the fact that your business involves highly confidential material, processes or expertise, in this case the executive summary should be revealed to the investors first. After that if they are interested in learning more about the business then you should make them sign a nondisclosure agreement (NDA) before showing them the entire plan.

5. The plan is too detailed:

Some entrepreneur makes their plans very comprehensive especially those which are based on some new technology. You should try to keep the technical details as minimum as possible in the business plan; if you want to include them then you should include it in the appendix. You can break your plan into three parts, first part will be a two to three page executive summary, second part will be a ten to twenty pages business plan and third part will be the appendix that can includes everything else needed by the plan which is not in the main part of the plan.

6. The plan is based on unrealistic assumptions:

When a business plan is made the entrepreneur has to make many assumptions. You should provide in your business plan all those assumptions that you had made regarding the business and you should also provide the explanation for the assumptions that you have made. You will have to make assumptions regarding the size of the market, price of the product or service, customer behavior etc. You should ensure that your assumptions are similar to that of the industrys standards.

7. The plan is inadequately researched:

The other mistake that entrepreneurs make is they do not perform adequate research for their business plan. It is very important to associate your assumptions to facts. You should try to learn more and more about your business and the industry, about the customers purchasing inclination, strengths and weaknesses of the business, competition, size of the market etc. You should have some figures, tables and information to support your assumptions or estimates that you make in your business plan.

8. The business plan does not include the information regarding both short and long term:

A good business plan should represent a summary of the business both in the short term and in the long term. A business plan not only describes how the business appears in the short term and the long term but it also describes how the business will get from one phase to another. A business plan acts as a roadmap for the business and it should be as precise as possible. The business plan must include specific and real targets and not vague one; like levelheaded goals may be producing 10,000 units of product or making 100 customers etc. The business plan must also include all the main steps that you will have to perform to reach your targets.

So these are some of the common mistakes that entrepreneurs generally make while writing their business plans. An entrepreneur have to work really hard to write a business plan, sometimes it may take a year or even more to write a business plan. A business plan writing software can also be used to draft a business plan.

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