Robust business plan is essential to raise finance and maximize profits. However, some business plans do not get implemented due to common errors business owners make when completing the business plan and during execution. They include:
- i) Incomplete financials This is perhaps the most important section of any business plan. Lenders want to know when they will have their loans repaid and assess the risk. You need to produce financial statements that accountants will endorse without dithering.
- ii) Over ambitious projections Everyone thinks his/her business will grow exponentially in the first 12 months but in reality this is rarely the case. Business plan must show a realistic path to profitability that proves actual revenues and profits.
- iii) Leaving crucial element out Strategic part of the business is mainly the focus of most failing business plans, ignoring the systems (policies and procedures), structure, skills (capabilities of the people in the organization), culture (norms, values, beliefs and assumptions) and budget. There is the need to ensure that all essential elements are correctly written in the right area of the plan and are properly aligned for the business to successfully operate.
- iv) Poor understanding of marketing Communicating products to prospects is a critical success factor for every business owner. Business plan therefore, must show that target customers are well known, their needs fully understood, justified reason why they will buy from the business and how the business will communicate with them. Also, the likely actions and reaction of the competitors should be anticipated and planned for. Get more updates. Subscribe here. Have a nice day.