Why Most Business Plans Fail And How You Can Avoid The Biggest Mistakes

Let’s start with why every business needs a business plan. Whilst a business plan will not guarantee you success, it will help you set clear objectives and evaluate every area of your idea. A good business plan will help you understand viability, uncover potential weaknesses, and determine what your priorities need to be. A business plan will also be a basic requirement if you require any external finance for your venture.

What should be in my business plan?

There’s no single answer to this question and there are differing views depending on where you go for advice. A good business plan should include:

• A clear overview of your business concept and objectives
• An assessment of the market conditions in which you will be operating
• A cash flow assessment (look one year ahead initially)
• A marketing and communications plan
• You contingency plan if anything goes wrong
• An introduction to your team and their credentials

What are the most common mistakes people make when they write business plans?

Enthusiasm can often get the better of people and that can result in widely optimistic business plans. It is always better to err on the side of caution when you are just getting started. If you think you have a weakness, be honest about it and describe it. And finally, do not seek to hide anything. If you are looking for external finance, withholding information about elements of your business plan is likely to catch you out and once people doubt your integrity they are extremely unlikely to lend you any money.

Any other advice?

Often what we think is clear can be very confusing to others. Whether you have people around you who understand your business concept or not, it’s important that they understand your document. If they don’t understand it the chances are nobody else will either. Let people read and critique your plan. Even if you elect not to change a thing, you’ll be better placed to deal with any questions on your plan.