8 Common Business Plan Mistakes

Most people grossly overestimate the value of their business and are chastised and shot down by reality when they are too far gone. It’s one of the most common business plan mistakes which is essentially Over-Hyping it’s potential. You may believe your business idea is the next big thing but you need to be able to back-up your claim with genuine numbers and statistics or even references. Over-hyping your business idea and littering your plan with superlatives like hottest and greatest does not substantiate your product or service.

Wow the right people with your business idea, research and financial plan, not with the words or numbers you think they want to hear. Lenders and investors expect to be shown a realistic picture of where your business is now and where it hopes to be, therefore if the plan is overly optimistic with no explanation of the projections, it will ring warning bells and cause the plan to be rejected or even cause you to make catastrophic financial mistakes.

Not every business will appeal to everyone. You must define your specific target market, present how you have made these assumptions and outline how you will specifically target this market.

All research must be double checked and substantiated. By using incorrect or out of date information you will discredit your business idea and the remainder of the plan. Failure to plan is planning to fail.

Even if you think you have a ‘unique’ business idea and are sure that no other business like yours exists, check and double check. There is no such thing as no competition. Even if your business is one of a kind, it comes down to one thing; if your business didn’t exist, but the customers’ need still existed, where would they spend their money?

Equally if you highlight your competition too much, if you are look for an investor, he/she may worry that the business will not survive. Focus on your niche, what differentiates you from the competition, how do you plan to compete in the marketplace, paint accurate picture of what the industry is like now and where you see it going in the future.

If you were an investor, would you want to read a 200 page business plan? The answer is most definitely NO. Most investors have a mental checklist of 10 to 12 points that they are looking for in the plan, everything else just gets in the way. The purpose of your plan is not to demonstrate the depth of your knowledge but to focus on the key elements of your business. Clear and concise writing is always appreciated and if you have additional information which you would like to include in the document, create an appendix.

Do not hide your weaknesses but do not highlight them too much. Every business has its weaknesses but by hiding them or highlighting them too much you will put off the investors or even put yourself in a negative state of mind. The only way to address these weaknesses is to include a detailed strategy of how you plan to address these problems. Make sure you ask several trusted and knowledgeable people to review your plan before submitting it. Another set of eyes will help your plan to look more professional and ensure that it reads correctly.

Have a secure plan how to provide your service or distribute your product. Including all possible channels (example: Tiktok, Rumble, Pinterest, Facebook, Youtube, Instagram, etc. (if you are a marketer)) in your plan without substantiating why these are the correct channels and how they will reach your target market will make the investor assume that you have just thought of the list off the top of your head. It can also make you feel like you don’t know what you are doing in the long-run after having spent thousands.

The ability to articulate your strategy about how your product or service will reach your client is vital.

Highlighting different target markets, quoting conflicting statistics or having competing strategies within a plan will make an investor challenge whether you know your business and its market well enough. Sections of plans are often written on different days or by different people and then pasted together into one document resulting in inconsistency. Take time to review each section of your business plan.