This post is part of my 31 Days to a Better Blog Project. Encouraged by the Day 2 Challenge, I am using the “List” technique for today’s blog.
As a small business owner, make the road to success even smoother by avoiding the common mistakes that business owners make. As you write your business plan, watch out for these ten potholes, roadblocks and detours.
- No Plan – Do not put off writing a business plan until you have no choice because their banker, investor, or potential landlord requires it. You will never have enough time unless you make the time. The busier you are, the more you need a plan to guide and simplify your decision-making process and automate day-to-day operations.
- No Clear Audience – Business plans are written for many different reasons: to take to the bank for a loan, to prove to potential investors your plan is marketable, or simply to guide your business. While the outline is the same, the amount of detail required in each section varies depending on the primary reader.
- Too Much Detail or the Wrong Type of Detail – Boil down the description of your business to a simple message; don’t get bogged down in the detail. Limit your product description to an overview, focusing on the problem your product solves and its unique features, and leave out the jargon and industry slang.
- Poorly Defined Customer – Everyone is not your customer. With a clear, specific definition of your target customer, it is easier to write a clear, specific plan.
- Limited Market Research – Does anyone really want your product? (By “anyone,” I mean anyone other than your mom, spouse, or best friend.) Surveys, focus groups, and informal conversations, even on a limited scope, help you evaluate the market for your product.
- Inadequate Competitive Assessment – Everyone has a competitor. Even unique and innovative products must deal with competing products or services that may or may not solve the same problem, but ultimately will compete for the end customer’s available resources.
- No Meaningful Goals and Milestones – A good business plan outlines goals which are challenging but attainable, specific and measurable
- Activities Not Tied to Goals – Your goals form the basis of other decisions. Eliminate activities which do not move you closer to your goals.
- Unsupported Financial Projections – Unrealistic financial projects with a hockey-stick-shaped growth curve, set up a business for failure when owners spend too much too soon without enough cash reserves to help the business through the startup phase. As you develop financial projections, consider two scenarios: a best case and a worst case.
- Inadequate Consideration of Pitfalls – Stuff happens! Things go wrong. When the worst happens, will you be prepared? Having an adequate assessment of risks is not being negative — it is being prepared.
- Failure to Communicate – I know, I promised a list of the ten most common mistakes, and this is the eleventh. While not directly a part of your document, poor communication can have a detrimental effect on your business. As you write your plan, involve anyone who could be affected by the plan. Seek advice from people you respect. Talk to employees, family members, business partners, and advisors, such as your accountant and lawyer. Ask their opinions and communicate your goals. It is easier to steer a boat if everyone is rowing in the same direction.