A priority before embarking on starting your own small business is to write a business plan, a document that is incredibly important for would-be business owners seeking loans and/or investors. A well written business plan provides an opportunity to explain what your company is, where you see it going, and how you will get there.
Unfortunately, there are a number of mistakes that aspiring entrepreneurs make in writing business plans. Here are some tips for avoiding common errors:
1. Poor Appearance
When people are judging your business plan, they are also judging you. Poor grammar, spelling, and presentation will make both you and your business seem second rate. Although you may spend weeks or months perfecting your business plan, most of your readers will spend a few minutes perusing it. Make a great first impression.
Be specific about the goals and target market of your small business. After reading your business plan, the reader should have a clear sense of your small business without having to ask many questions. Your descriptions and language should be simple — think of writing for a recent high school graduate.
3. Lack of Research
If you display lack of knowledge about the particular field you want to enter, your readers will surely not be impressed. Learn as much as possible about the industry and the world of small business, and be aware of consumer habits, market trends, and competition. Back up these facts with numbers and statistics. It’s also a good idea to consult a variety of experts or sources.
4. Not Studying Your Market
What is it about the product or service you want to offer that appeals to your target market? Is the market size increasing or diminishing? Be aware of certain technological advancements or other such changes that may alter your target market or the appeal of your small business.
5. Assuming You Have No Competition
You will most likely always have some form of competition in the small business world. Writing in your business plan that you have no competitors is a sure-fire path to rejection. Use the “competition” section of your business plan as a way to showcase your strengths of your small business within the industry. Explain what makes your product different or better.