Business Plan: 10 tips to avoid mistakes

Business Plan

When you decide to start a new business one of the first things to do is write the business plan.

The business plan is a document that contains the synthesis of the business idea, assesses the economic and financial feasibility and dictates the times and methods for the realization of each project phase.

At the base of a successful company there is almost always a business plan done well, but very often it is difficult to understand where you are wrong and why. Online we find several articles that explain what the business plan is, what it must contain and how it should be written, but also if we followed all the steps (described the financial structure, the mission, the reference market, the economic plan- financial and operational plan) this is not enough to avoid making mistakes.

To be wrong is human, but doing it in a business plan is risky and, since the content varies depending on the type of business you decide to develop, what we can do to help you avoid mistakes is to give you some more advice.

Business Plan

1) The business plan is not a static document

The first mistake that is often made is to think that the business plan is a static document that, once written, cannot be changed. In reality, the development plan of a company is drawn up over a period of time ranging from 3 to 5 years and for this it must be continuously updated. Periodically, the economic results achieved must be added and a new estimate of the company’s growth based on the actual data collected over a given period of time must be made.

2) Inquire well before starting

The second mistake of many startups or young companies is to think that the information they have available is sufficient to draw up a business plan. Very often it is not like that. Before starting the writing of the actual document, it is necessary to have clear not only the content of the project but also the form that it must have.

3) Not all business plans are the same

An important advice regards the structure of the document, which does not necessarily have to follow a predefined format. Since not all companies are the same, the business plan will also have to adapt to the type of product and the business model it has to represent. Online there are many business plan templates ready, but they are not always functional to the needs of the company. This is particularly true for innovative start-ups, which often do not have standard organizational and operating procedures and I must find the model that best suits their needs.

4) Do not underestimate the human aspect

A business plan is not just about numbers. Behind each number and behind every strategic choice, there is a person (or a team of people) who is responsible for it. To think of drafting a strategic plan for the growth of a company without proper attention to its human resources would be a serious mistake. Make sure that within the document you have prepared there is also a human resources management plan (employees and collaborators) with a detail dedicated to professional growth forecasts and how each objective will be achieved (training courses, internal evaluations, any new recruitment).

5) Ask for help from professionals

Always remember that behind a business plan there is a business, which in order to grow needs competent people in every sector of the company. From the marketing manager, to the auditor of the economic accounts, from the legal counsel who stipulates the contracts to the sales manager: each one must respond according to their own competences.

But the most important thing is that those who make decisions and administer the company know how to surround themselves with people they trust and delegate each function to those in charge, asking for help from consultants and external professionals if necessary.

Business Plan

6) Changing your mind is not always a good idea

It is often read that companies to innovate and be successful must be ready for change. But this does not mean that there must always be a change of direction, which inevitably turns into a change to the business plan. Before asserting with certainty that a strategic choice has proved wrong or that an operational path taken does not work, it is necessary to reach the end of the process, which means waiting for the time necessary for it to end. Only then can you decide to change.

7) Slide, video, images: more simplicity and clarity

If we are to present the business plan to potential investors, a good practice is to simplify it and make it immediately understandable to our potential customers. Preparing a presentation with images, videos and clear slides to support what we will tell aloud, is certainly useful and beneficial.

8) Always have a plan B

One of the most common mistakes is not to provide an exit strategy for its members. It seems trivial but in reality the reasons why companies fail are often linked to the relationships between the members. Provide a way out in case the business idea does not work, or if one of the partners decides to leave the company, is an important content to be included in your business plan.

 9)  Accept negative feedback

The criticisms, when constructive, are a very important strong point that we must be able to welcome and exploit to improve our business strategy. Whatever kind of feedback we receive, let’s not take it as a personal attack, but let’s use it as a starting point to change our business plan.

10) Never underestimate the form

Refuse, distracting errors or worse than grammar are absolutely to be avoided. Do not make the mistake of thinking that the substance is the only thing that matters. Although it is certainly important that all the pieces of the puzzle work, the form is what will help us present ourselves to the outside world in the best possible way and it is not to be underestimated.