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Avoid These Business Plan Errors at All Costs

Writing a business plan is filled with pitfalls. You could make it too long, which will turn the reader off and bore him, or you could make it unattractive to the eye, which will also repulse the reader. However, some errors are just way too damaging to your business plan that you have to avoid them at all costs. If you make any of the following errors in your business plan, then your business plan is doomed. Here are the business plan errors you must avoid at all costs.

The Projection of Excessive Profits

For too many people, it’s quite tempting to project profits that are just through the roof. They think that doing so will cause funders to fall in love with them and be won over, but that isn’t the case. Many businesses average a projection rate of between 10 percent and 15 percent, so if you’re projecting profits well beyond that range, it’s time to rein in those outrageous predictions. That is, if you want your readers to take you seriously.

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The Incompletion of Financial Projections

Your business plan must feature a highly realistic cash flow projection as well as a breakdown of starting expenses. It’s great to utilize charts to show this, yet you must also make sure these details are displayed somewhere within the actual document. Even including this information of financial projections in the appendices is a great idea. It’s not adequate to only project your company’s sales and profits; you must demonstrate how much investment you require and what you’ll do with the cash.

Top-down Forecasts

Top-down forecasting is a major no-no. Make sure you don’t promise that your company will obtain a small chuck of a very big market. Chances are that your company simply will not sell that much, even if the chunk is very tiny. Instead, go the granular route. Begin with certain assumptions and then work your way up to the sales forecast! Construct these sales forecasts from the unit economics that you can detail and back up.

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These are the very worst business plan errors that you just have to avoid at all costs. The success of receiving funding for your business depends on it! So when you’re drafting your business plan, be sure to avoid making outlandish and extreme profits, and be sure to only provide complete financial projections. Avoid the above errors, and you’ll see that your business plan will be well-received.

Peter

Business Plan Tips

Almost anyone can write a business plan, but not everyone can write a polished business plan. A polished business plan is one that reads excellently, informs the reader in a concise way, and doesn’t take forever to bring across the important facts. In short, it is a business plan that will get noticed, and that’s what you want! After all, this report is what you’ll present to different funders, so that you can get backing for your business dreams. Here is how you can polish your business plan effectively.

Limit the Font to Just Two

It’s important to stay with just two fonts for your whole business plan. This is in keeping with the “less is more” philosophy of a polished plan. The font you rely on for the headings ought to be a very basic sans-serif font. Good examples of this type of font are Arial, Verdana or Tahoma. For the text of the plan’s body, you ought to rely on a very standard text font. Examples of a standard text font are Times Roman and Century.

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Stay Away From Smaller Fonts

This piece of advice is extremely basic: Just do not use smaller fonts. It’s harder to read your business plan if someone has to actually strain his eyes in order to make out the words! Only a very small number of the sufficiently readable fonts are actually acceptable at 10 points. On the other hand, most of the fonts are easier to read when they’re at least size 11 or 12.

Page Breaks Are Your Friend

It’s always a really good idea to depend on page breaks in order to split up the various sections of your body. Page breaks are also a great idea for the separation of charts from text and even to highlight different tables. If you’re in doubt about having enough space, then simply move on to the next page. Don’t worry! No one’s going to hold it against you if they have to turn to the next page.

There you have it! These are the best ways to polish your business plan and make it look like something truly worth reading. Just remember all these tips, and your business plan will be one of the most polished ever. Watch your fonts, don’t make them too small, and rely on page breaks when necessary. Failure to incorporate these pointers will result in an unreadable plan, which is what you don’t want.

==> Download your business plan template now!

Peter

What to Consider Before You Start Writing Your Business Plan

Too many people make the same mistake: They begin writing their business plans without first stopping to consider just what it is they want to accomplish. This will lead to disorganized business plans that will end up doing more harm than any good to their business prospects. For example, how long should your business plan be? Many experts actually suggest a briefer and more concise plan over one that is overly detailed and excessive in length. Here’s what to consider before you write your business plan.

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Shorten Your Prose
The number one rule about the length of your business plan is this: Efficient business writing is not hard to read. Longer business plans are harder to read because people don’t have the patience, and they’ll instead just begin to skim through your plan instead of giving it the time it deserves! So stop wasting your time by writing longer prose and instead shorten it. Keep your prose short and to the point, and it’ll be better for everyone.

Shorten the Overall Length
It used to be that business plans were somewhat long. Today, that has changed entirely, as the average business plan is approximately just between 20 and 30 pages. You’ll also need another 10 pages at most for your appendices, where you’ll cover management resumes, monthly projections and other information. If your plan goes beyond 40 pages in total, then chances are that you’re not well-organized and failing to effectively sum up your plan for potential funders!

==> Download your business plan template now!

Utilize Business Charts
See to it that your vital numbers and figures are simple to find and easy to comprehend. To do this, just rely on tools such as summary tables and even basic business charts in order to really bring out your most important numbers. Also, be sure the associated details are simple to locate in your appendices. You should use practical bar graphs to demonstrate, at the very least, your gross margin, sales, net worth, cash flow and net profits.

These are the most important things to consider before you begin the actual process of writing your business plan. A business plan is highly important to your future success, so be sure not to rush yourself by creating a sub-par plan. Be sure to keep your prose short, and watch the length of your entire business plan. Finally, be sure to make use of simple and highly visual charts. Following these tips will lead to a great business plan.

Peter

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All the best,

-Peter

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