Top 5 Mistakes to Avoid When Writing Your Business Plan

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.

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About Bruce Hurta

Bruce Hurta has extensive experience in Small Business Lending. He has served in a number of commercial lending and banking capacities in his career including, President of a Houston-area community bank for 6 years, managed Independence Funding Company, a non-bank start-up in 1994, where he developed his SBA lending expertise. Bruce spent 4 years in Finance as a bank examiner for the Texas Banking Department, 7 years in executive management at two community banks, and 14 years as SBA Lender. He is active in the commercial realtor and business brokerage communities, along with various business and industry organizations. Bruce Hurta is Vice President - Business Development in Houston, TX for Fidelity Bank SBA Lending nationwide. Fidelity Bank offers SBA 7(a) loans, SBA 504 loans, and USDA loans for small businesses to purchase or construct new buildings for their small business operations, to acquire a business, to expand a business or to buy out a business partner.
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