Creating a business plan can be perceived as a very difficult and daunting task. The strategic business plan is truly very important, with the aid of an outstanding business plan which supplies several sections providing significant information, effective strategic planning can be achieved. Business plans are generally the first step new business owners take. However, often new entrepreneurs have a lack of knowledge. Often resulting in errors being made. Listed below are the top 8 business plan errors that are made on a regular basis:
1. Completing it in one big push. ? Often, business plans are attempted to be completed in one session. By no means is this the right way to go about it. A business plan is a set of modules, like blocks. Many individuals initially don?t know where to begin, but technically there is no specific starting point, you can start anywhere just to get going. There may be some sections that will offer an instant advantage towards the progression of your business, start with these sections and advance from there.
2.Being confused regarding the overall purpose of the plan. A business plan isn?t just a document that can be stowed away in a file, the prime reason for a business plan is to plan. The key mistake that is made by many business owners, is that they create the business plan as a foundation document for the business, and think that is its function, this is not the case, it is a key document to look back on at all times and review the business progress and to make sure they are going down the correct path.
3. Leaving the plan incomplete. ? Often entrepreneurs and small business?s leave their business plan incomplete, thinking otherwise. An unfinished business plan is often rendered useless. At an absolute minimum, you plan must cover your customers, products, operations, marketing and sales, management team and competitors. The industry your business is situated and its trends also fulfills a complete business plan.
4. Hiding your plan from your team. ? A common mistake that managers do, is not sharing the business plan with your team. A business plan must fulfill its function as a management tool. Evidentially, there are some aspects of the business plan, that managers and business owners should keep private, however there are many areas that can be seen by the team. All members of a business must be aware of the goals and objectives of the business. By knowing the aims of the business, each member will collaborate and work more efficiently as a team, also each team member will feel more valued.
5. Don?t confuse cash with profits. ? Believe it or not, there is a huge difference between the two. Cash flow is the money that flows in and out of the firm from operations, financing activities, and investing activities. Profit, also called net income, is what remains from sales revenue after all the firm?s expenses are subtracted. Companies can make a profit but still have a negative cash flow and not be able to pay their bills. Not recognizing this difference is one of the biggest mistakes a small business owner can make. Misunderstanding these two monetary values could leave your business in a very insecure position.
6.Focusing on too many priorities. Lists of 20+ priorities is the common approach taken by many business planners. This can often cause dilution. By condensing your priority list to below 5, will give you business plan focus and drive. Too many priorities can cause a large misunderstanding across your workforce, ultimately, progressing nowhere.
7.Relying on your business idea, rather than your business. ? An idea alone does not create a great business. It has been known that new businesses try to rely on the idea alone. What gives an idea value is the business that the idea is built on. You must ensure that you write a business plan that shows you building a business that supports your idea.
8. Making irrational forecasts. The forecasts made in a business plan must be reliable and practical. Otherwise, the business can easily be considered as an invaluable venture. In the event of calculating unusually high profitability figures for instance. A business will see this increase in profits as an opportunity to grow etc. And realistically, if this decision is made, and the profitability figures aren?t as expected, the business will be in a very unstable sitaution.
My professional experience has been close to 20 years as a small business owner, consultant, writer/editor, Real Estate Manager, AutoCAD draftsman, community volunteer, and teacher. Small Businesses and Entrepreneurship is an interest of mine. I am the managing editor of this site - Small Business Advice For Today's Economy! - (www.small-businessadvice.com) which is a web destination tailored to the small business owner, where innovative and competitive businesses provide information about their B2B services and products. The site is also a portal for the latest small business news worldwide.
If you're new here, take a moment and subscribe to our RSS feed. Thanks for visiting!
jason whitlock beach boys tony bennett joe walsh the civil wars paul mccartney duggar miscarriage
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.