For years you’ve toyed with the idea of starting your own business. You’ve fancied yourself as an entrepreneur and you’re ready to make the move from a corporate pencil pusher to a business owner. You’re excited to get started and have found the inspiration needed to begin the process of transitioning out of the daily grind and into the excitement of small business ownership. The only problem, you don’t know where to start!
Any small business owner will tell you that the first step to business ownership is writing a business plan. A clear and persuasive business plan provides you with a blueprint that will guide you in building a successful business. It can help you narrow down your goals, as well as help you secure funding in the form of loans or funding from investors to help you get your business started.
When it comes to finding information on how to craft an executive summary, how to shape your marketing plans, and how to convey your financial projections, there is no limit to the number of resources you can turn to for help. However, with all of the information that is available at your fingertips, there are a number of common mistakes ambitious entrepreneurs tend to make when sitting down and writing a business plan.
Turning it Into a Piece of Art
Your business plan should only be showing off your ideas for making your business idea successful, not for showing off your computer skills. Your business plan needs to be clean, crisp, and easy to read. You need to avoid using any fancy fonts, pretty borders, and unnecessary artwork. Keep this for your marketing and advertising pieces. Your business plan is meant to be shown to individuals who may be interested in investing in your company or who you are trying to loan money from. There is no room for distractions.
Being Too Optimistic
When writing a business plan it can be tempting to overestimate the revenue you are expecting to gain. Potential banks and investors expect you to show them a realistic picture of where you think your business will be in the next few years. If your projections are exceedingly optimistic and you aren’t able to back up those projects with valid explanations, you risk having your plan rejected. According to John W. Taylor, writer for Inc., being overly optimistic often times will make you sound as if you don’t have a clue as to what you are doing. So unless you are absolutely sure you can reach those big numbers, keep them realistic.
Dismissing the Competition
Even if your business is unique, you always have to address the potential competition that your business will face. No matter how unique your product or service is, there is no such thing as no competition. Your competition can include a business that focuses on a different solution to the same problem, different ways in which your customers may choose to spend their money, or even disinterest for your product in the marketplace. Even if your business is one of a kind, it comes down to the dollar, Rab Kooner points out in an article for Small Business BC. If you weren’t in business, but your customers still needed a service provided, where would they spend their money?
Creating a business plan is an important part of starting a business. It is essential if you are looking for investors to help with your start-up costs or if you are looking to secure a loan from a bank. Making sure that your plan is written well and is properly formatted can mean the difference between obtaining the funding your business needs and finding yourself empty handed when you go to open the doors.