Whether or not you’re seeking financing from lenders, it’s essential to create a comprehensive, well-thought-out business plan. Think of it like a road map to help you think objectively about your business idea and build strategies for the future. If you haven’t written a business plan before, we know it can seem daunting. To help guide you, we’ve listed some of the most common pitfalls of writing a business plan and tips on how to avoid them.
1. Create a Vision for Your Business
Once you’ve come up with the idea for your business, it’s often tempting to roll up your sleeves and dive right into market research and operational logistics. Before you get lost in the details, it’s important to have a clear vision of what you want your business to be and a set of values you want to adhere to. This will help you establish your priorities and plan more effectively.
2. Know That a Financial Plan Is Different From a Business Plan
You can’t create a solid plan without a financial plan and forecast. Your financial plan should ultimately reflect all of the elements in your business plan. If you haven’t completed market research on your industry, your numbers won’t be as accurate. Get numbers from customers and competitors before you create your financial plan.
3. Remember Your Customers
Many entrepreneurs come up with brilliant ideas, thinking they know exactly what their client wants. But, they rarely ever verify this with their client. Take time to understand your customers and build your business plan according to what they need and how you’ll service that need.
4. Pay Attention to your Competition
Don’t assume that you’ll be the only business offering your product or service. Research your market and find companies similar to yours. Study them and find out what works for their business and what doesn’t. Then, make improvements.
5. Don’t Avoid Risk
Creating a business plan isn’t about avoiding risk, it’s about understanding and managing risk. Your business plan should anticipate possible challenges and include a plan for addressing them. Remember, there’s a difference between calculated risk and recklessness, your plan should help you make that distinction.
6. Get a Third Party Review
It’s difficult to detach yourself and review your plan objectively, so ask a third party to review your plan. They’ll be able to highlight any areas you might need to improve or any areas you may have missed.
7. Expect the Unexpected
It’s important to leave some room in your plan for unexpected changes. Whether it’s in your budgets or your marketing and operational plan, integrate some flexibility.
8. Don’t Skip the Plan
The worst mistake of all is not creating a business plan in the first place. Writing a plan is hard work, but it’s the best way to turn your idea into a reality and bring you a step closer to success
Get Started on your business plan by downloading Small Business BC’s Business Plan Template and Cash Flow Forecasting Tool.
Small Business BC is Here to Help
SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars, on-demand E-Learning Education, our Talk to an Expert Advisories, or browse our business articles.