Andre Diederichs, SMME specialist at Old Mutual sheds light on the areas where many entrepreneurs fall short.
There are many mistakes aspiring entrepreneurs can make when putting together a business plan. Firstly, one must consider the role of a business plan.
It serves as a window through which the entrepreneur allows interested parties a bird’s eye view of the prospective business.
The plan must therefore be an accurate and comprehensive reflection of the business – in fact, it must act as a blueprint of the operational mechanics of a business.
Common Business Plan Mistakes
With this in mind, these are some of the common mistakes made with business plans:
- A poorly researched plan. A vague business concept, or idea on paper is often not workable in practice if too little time and energy is spent on doing your homework.
- Long-winded and boring. A plan should emanate the energy, insight and excitement of the entrepreneur.
- Limited financial forecasts. This may show a lack of, or limited understanding of the intended venture.
- Unprofessional presentation. This would translate into paying no attention to detail which is necessary in business. For presentation purposes, you may need to employ a professional graphic designer to assist in designing your presentation.
- Too little time is spent on the promotional aspects for the business. In other words the entrepreneur has no or little idea how he or she is going to advertise/promote or market his products and services in order to get the feet through their doors. The plan merely reflects what others have done in the past with no imagination for advertising the business’s products or service. In other words, the advertising/marketing plan has nothing new to offer with no thinking out of the box.
- Limited marketing intelligence. How can you expect to capture a particular market if you have no idea of what your competitors are doing? Perhaps a headline: What separates my business from the next and then list the differentiating factors showing a novel approach that will give you a competitive edge.
- Poor profiling of products and/or services. Your in-depth knowledge of your products and/or service should jump off the pages in your business plan.
- Disregard for your business plan. It should be a dynamic working document and a guideline to managing your business that should be revisited and updated on a regular basis.
Get investors to take you seriously
If you want role players or potential investors to take your business seriously then your business plan should:
- Be well researched and professionally presented;
- Be concise;
- Profile your business in a novel way – doing things differently will have different results – guaranteed!
Include enough research on financial forecasts, or planning that demonstrates the seriousness of your intent and that you are familiar with the finer aspects of financial management.
The main question entrepreneurs need to ask themselves: How must I package and present my business plan that will make the right impression on potential investors?