10 Mistakes Not to Make in Your Business Plan

Writing a business plan for the first time is never easy. There are many lists of mistakes to avoid and advice on the web, unfortunately most are content to give vague indications such as “do not overestimate sales and do not underestimate costs”. We wanted to go a little further by giving you a detailed list of mistakes to avoid and tips to improve your plan.

We hope this guide will help you in writing your business plan. As usual, do not hesitate to send us your suggestions, questions, or comments; and share it on social media.

Without further ado, here is the list of 10 mistakes not to make in your business plan:

Mistake 01  - Underestimating the writing time of the business plan

Don’t do this at the last minute: writing a plan that is both robust and convincing takes a little time.

Mistake 02  - Spending too much time making a business plan

Don’t lock yourself in for 2 months to write your plan. Promote the time spent in the field to meet your potential customers and refine the project.

There is no perfect business plan because your project will develop. Lay the foundations of your strategy on paper, then execute the plan, then reread it from time to time to take stock, take a step back, and adjust it.

Mistake 03  - Not spreading operational risk over time

One aim of the business plan is to show the investor that you know how to manage risks, starting with the operational risk of your company.

It is at the beginning of your activity that the operational risk is greatest: you have no client and there is no guarantee your concept will be successful.

Mistake 04  - Not having your business plan proofread by someone who knows nothing about your sector

Your banker may not be familiar with your sector, so try to avoid jargon. Some parts of your business plan may be hard for them to understand.

Having your plan reviewed by someone who knows nothing about your industry is the best way to ensure that your banker understands your entire plan.

Mistake 05  - Not engaging the entire team to write the business plan

They should write the business plan as a team. The sales forecast must be done with the help of the sales manager, the personnel plan with the person in charge of HR, etc.

This helps create a more realistic business plan and ensures the entire team is comfortable with the plan to execute.

Mistake 6  - Underestimating the legal or regulatory risks

The typical example of this error is the team that created a beta version of a mobile application and received a helping hand from fellow developers or outsourced some of the development. The question of the intellectual property of the source code of the application then arises.

Another example is the team without a developer who launched a website through a service provider without verifying that the contract included a transfer of intellectual property.

When the project includes a significant part of intangible, it is good to include a section on intellectual property to reassure the investor. It’s also helpful to show you’ve got your back covered by including a section on business regulations in the plan.

Mistake 7  - Not expecting reader questions

We sometimes see business plans that raise more questions than they provide answers. Try to put yourself in the shoes of the investor or the banker and try to expect their questions as much as possible in order to answer them in the plan.

It is also useful to include a risk section in the plan where you can list the major project risks and try to show that you have expected them and are prepared to deal with them.

Mistake 08  - The plan is too vague because you don’t want to reveal industrial secrets

Capital investors will not sign a confidentiality agreement and the alternative to this refusal is not to send a very vague plan. Your plan should allow the investor to understand the ins and outs of your business idea and be specific enough to convince them to invest.

Mistake 09  - Showing a team with a skill deficit

If you lack a key skill in the team, you must absolutely expect questions from your financial partners and explain the steps you have or are going to take to fill this gap (recruitment, external consultancy service, member of the board of directors who can help on the subject, etc.).

Mistake 10  - Not knowing your competitors

“We have no competition,” as Steve Blank suggests, it is inherently untrue. Even if the current solution involves basic tools like paper and pencil, there is most likely already at least one method of solving the problem that your product or service addresses.

Do your research, explain the problem you’re solving and how your potential customers are doing right now, and you should find a set of direct and indirect competitors fairly quickly.