Lesson learned and avoid these mistake…Enjoy.
You’re Selling What?
You may know what you sell, but does your business plan clearly and concisely describe your product or service to the reader? Many business plan writers incorrectly assume that the person reading their plan is familiar with their business. Unfortunately, this typically leads to a swift and final “no” from lenders and investors. Instead, define and describe your product for someone who knows little or nothing about your industry, and include the benefits of what you offer in addition to the basic features.
“I Sell to Everyone!”
No you don’t – and a solid understanding of your target market can be the difference between the success and failure of a business. Defining your target market forces you to consider the most important benefits for potential clients, focus your marketing efforts to reach the right audience and determine the most cost-effective channel to deliver your products or services. Define your targeted customers in detail, including extensive demographic traits and in more subjective traits such as lifestyle or personality types.
Your Competitors Know You Exist!
A business plan lacking a comprehensive competitive analysis is destined for the trashcan of most investors. In order to avoid this fate; include a thorough and unbiased analysis of your competition in your business plan. Experienced capital sources are well aware that competition exists, don’t insult them. But, be sure to acknowledge the positive side that competition may have for a business and its performance. Be certain your business plan identifies your competition, what they sell, what market share they hold and what strengths and weaknesses they have – then outline how your company stacks up.
Even Batman Had Robin!
No one ever said running a company was easy, and with the lack of hours in a day (typically only 24), a well-rounded team of individuals is often critical. One-person operations are limited in terms of the time, experience and core business skills necessary to launch and grow a serious business. Capital sources expect, and often demand, a team of professionals who are competent in each business function that is crucial for your company’s success (i.e. marketing, sales, operations, finance, manufacturing, engineering, etc.). Present the background and job responsibilities for each member of your management team, and include a discussion about your board of advisors and key consultants.
The Exit Strategy – With No Exit and No Strategy.
Business plans are excellent tools for planning, but they’re essential for raising capital and securing loans. As you’re searching for your big payoff, don’t forget that investors commit capital based on their ability to recoup their initial investment plus a healthy profit. Prepare a full set of financial projections and then outline what you’ll do with the money, the potential returns, and your intended pay back period. Your exit strategy should take your personal and professional goals into account, but also meet the needs and requirements of the person writing the check – your investor.
- 5 Mistakes Your Business Plan Must Avoid (powerhomebiz.com)
- 3 Next Steps to Growing Your Small Business (smallbizbee.com)
- 10 entrepreneurial mistakes (leepublish.typepad.com)
- Five Reasons Why Small Businesses Fail (hiscoxusa.com)