Whether rounding up investors or attempting to get a loan, writing a business plan is an extraordinarily important process. A business plan isn’t just a vehicle by which you acquire funding; it will also be the very basis of your company’s strategy for the foreseeable future.
1. Compiling Inaccurate Financial Data
Not only is this a huge faux-pas in a business plan, it can also ultimately hurt you and your business. Accurate financial data is extremely important to show you where your cash flow is. If you aren’t keeping your bookkeeping and financial information up to date, you may have no idea where you truly are.
2. Underestimating Its Importance
Many business owners may assume that because they have good credit and their business has been doing well, their business plan doesn’t matter. The business plan is one of the first things lenders look at to determine why you need their money and whether they will actually be seeing a return.
3. Be Realistic
Don’t get overexcited when you are making your plans. Your data and facts need to be based on real numbers. Your investors or lenders are likely experts, and will be able to see if you decided to pad or inflate numbers. You need to be confident in your plan. If your plan doesn’t seem as though it is as lucrative as you initially thought, you should make modifications in your premise, not your conclusions.
4. Don’t Be Afraid to Modify
If you find that your first round of lenders or investors weren’t wild about your small business plan, don’t keep going in with the same arsenal. You can revise your business plan to address the concerns that have been expressed before going to bat again.
5. Always Acknowledge Your Competition
Your investors know that you already have competition. This is simply something that is accepted within any industry. By not acknowledging your competition, your business plan will seem as though it is lacking a vital component. You need to discuss why you are better than your competition rather than avoid the topic entirely.