- The plan is poorly written
Just like all serious official writings, spelling, grammar, punctuation, and writing style are crucial when it comes to writing your business plan. Although investors invest in good dreams and not English grammar, proper writing will often show how serious you are with your business and details. When simple things such as spelling and grammar are not done well, investors will immediately have second thoughts on how you can perform in most technical parts of operations such as finance. Before presenting your business plan, go through every line and sentence or even find someone strong in English to help you.
- Poorly defined target customers and clients
Defining your intended audience and understanding how your product or service will be valuable to them is a core role of a business plan. This often includes segmenting your target customers and how the products and services you offer will satisfy their diverse needs. Sadly, many business plans generalize their target customer definitions. Failing to define the needs clearly will make your plan complicated and ambiguous.
- Sloppy presentation of the plan
Once you have written your business plan perfectly, you should prepare to present it correctly. Avoid inconsistencies such as missing page numbers, charts, tables, and headings as this is likely to irk investors. Before presenting the plan, look for someone to proofread it for you and correct the errors that arise.
- Unrealistic projections
Although a business plan should convince potential investors that it can generate profits, unrealistic projections should be avoided at all costs. This is a mistake that many young entrepreneurs make. Most business plans make false assumptions about market size, competition, profit projections, and financial risks. Although projections are all about the unknown future, they should be reasonable. Base your analysis on market trends and past revenue and development costs instead of imaginary figures.
- Incomplete business plan
Every business plan must be complete and accurate. A complete business plan must clearly explain products and services, sales and operations, and marketing strategies. It must also show competitors, management teams, and sales strategies as a minimum. Unfortunately, most businesses fail to include these essential parts or are not as elaborate as they should be. Your plan should have well detailed financial projections, cash-flows, and income statements as well as balance statements for at least three years. This will give investors the confidence they need.
- Vague business plan
A business plan should be straight and to the point, unlike a novel, which can be confusing and hard to understand. If your business plan is too hard for an average person to understand, then you should consider rewriting it. If there are some areas that are secret and that carry highly confidential material that cannot be shared with the public, show them at the executive summary. For those who want to see such information, they should sign non-disclosure agreements before being given access. In whatever you do, ensure that your business plan is complete and precise for venture capitalists and investors to understand.
Generally, you should always be aware of the common mistakes that people encounter when writing business plans and ensure that you do not fall victim to them. Find a coach who can show you around in case you do not have enough confidence. This will enable you to write a well-thought-of and complete business plan that meets the definition of a well-written plan.