- Being all things to all people.
What is the purpose of the plan?
Who is the audience for the plan
Whose perspective are you taking?
- Not focusing on the competition.
Playing down the competition.
“We have no competition”.
No competitive analysis
- Unfounded and unrealistic assumptions Overhyped Revenues overestimated The “hockey stick” growth curve Industry size ill-defined Market size too optimistic
- Inadequate research
Weak market research
Failure to demonstrate demand Lack of sources or citations
- No risk analysis Hiding your weaknesses Lack of experience Claims of no risk Poor mitigation strategies
- Unrealistic financial projections Financials do not make sense Assumptions not listed Essential expenses omitted
- No plan of how to get there How will you make it happen? What is your route to market? Not knowing your distribution channels
- Business plan inconsistencies
“Logic bombs” in the plan
No plan to manage volume
- Top-down financial projections 1% of $10 Billion Market Assume payroll at 50% of sales Comparison to branches of major chains
- Lack of a viable opportunity No evidence of demand If I build it, they will come A solution looking for a problem
- Not understanding cash flows Cash is the lifeblood of business Profits are not the same as cash flow Timing, timing, timing
- Not defining your target market Everybody needs our product Valid value proposition Geographic, demographic or psychographic
This is one of a series of blog posts about common mistakes found in business plans. Remember, you may be writing your first business plan, but the person reading it has probably seen hundreds. You want the reader to say “Yes” to your business plan, so don’t make it easy for them to say “No”.