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AVOIDING BUSINESS PLAN MISTAKES

03 May 2021 // by Dave Hickey

Once you know what mistakes not to make, there are still a few steps you need to take to make your business plan “bulletproof.” Be sure you . . .

  • Think it through. You might have a great idea, but have you carefully mapped out all the steps you’ll need to take to make the business a reality? Think about building your management team, hiring salespeople, setting up operations, getting your first customer, protecting yourself from lawsuits, outmanoeuvring your competition, and so on. Think about cash flow and what measures you can take to minimise your expenses and maximise your revenue.
  • Do your research. Investigate everything you can about your proposed business before you start writing your business plan: and long before you start the business. You’ll also need to continue your research while you write the business plan, since inevitably, things will change as you uncover critical information. And while you’re researching, be sure to consult multiple sources since many times the ‘experts’ will disagree.
  • Research your potential customers and competitors. Is your product or service something people really want or need, or is it just “cool”? Study your market. Is it growing or shrinking? Could some sort of disruptive technology or regulatory change alter the market in fundamental ways? Why do you think people will buy your product or service? If you don’t have any customers or clients yet, you’ll need to convince investors that you have something people really want or need, and more important, that they’ll buy it at the price you expect.
  • Get (lots of) feedback. Obtain as much feedback as you can from trusted friends, colleagues, non-profit organisations, and potential investors or lenders. You’ll quickly find that almost everyone thinks they’re an expert and they all could do a better job than you. This may be annoying, but it’s just part of the feedback process. You’ll know when you’re done when you’ve heard the same questions and criticisms again and again and have a good answer to almost everything anyone can throw at you.
  • Hire professional help. Find a professional you trust to help guide you through the entire process, fill in knowledge gaps (for instance, if you know marketing but not finance, you should hire a finance expert), provide additional, unbiased feedback, and package your plan in an attractive, professional format.

Writing a business plan is hard work. Many people spend a year or more writing their plan.

The hardest part is developing a coherent picture of the business that makes sense, is appealing to others and provides a reasonable road map for the future. Your products, services, business model, customers, marketing and sales plan, internal operations, management team and financial projections must all tie together seamlessly. If they don’t, you may not ever get your business off the ground.

A person climbing over the word Mistake to reach new heights and attain success despite past errors
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