The Most Common Errors When Writing A Business Plan
The thought of compiling a formal business plan can be quite daunting to the entrepreneur. Many of us see ourselves as the creative type rather than the formal intellectual and we might have an inbuilt tendency to try and fly by the “seat of our pants”. In spite of the pain, perceived or otherwise, involved in its creation, we must invest the time and effort to come up with a formal business plan. It is not as hard as you think, there are plenty of good books on the subject and some really great software packages, such as Business Plan Pro, for example.
So what are the most common errors people face when writing a business plan? Apart from the obvious – procrastination – you should always make sure that you include the necessary items. Make sure that you do devote time to creating the plan and don’t use any excuses, such as your busy schedule. You must look at the bigger picture, which includes the need to craft a formal projection of where you want to go.
When constructing your business plan, think in terms of cash rather than profits. Even though you may come up with a projection which you like – income being greater than expenses – you must understand cash flow. A profit and loss statement should be almost secondary to your cash flow statement, as you must ensure that you have enough cash in hand on a day-by-day basis to even survive.
Don’t focus too much on your grand idea, but make sure that you have all the fundamentals covered. A bold idea is hard to sell, so you need to stress that you have the available time, common sense and business smarts to succeed. If you are looking for investors, they will be more interested in you and/or your people, rather than the idea.
When you’re compiling a business plan, leave out the hype. Do not use any colorful language or preconceived notions. People who will be looking at your business plan will want to see hard, solid facts, backed up by very reasonable assumptions. Milestones must be set, tasks established and sound logic applied to your reasoning.
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The Chief - Prashanth Raj is the Brainchild behind AskNanu and a professional Blogger. Raj is a Specialist in Business Development, Sales & Marketing, Product Development, Partner & Alliance Management, Advertising & Strategic Planning. He spent few years with top notch corporates, working exclusively with technology & internet companies. He has deep insights on IT, Internet and Startups.
Raj can be reached by email at chief at asknanu dot com
