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11 Common Business Plan Mistakes You Should Avoid

6 min. read

Updated February 9, 2024

During a business crisis, change comes at you fast. Meaning that good business planning is crucial to the survival and success of your business. However, even when you’re not navigating through a crisis, it’s easy to make mistakes that can prove to be costly for your business.

• What are the most common mistakes when writing a business plan?

Some common mistakes are classics. Others are reflections of the growing need for planning as steering and management tools. But they are all common pitfalls to avoid. Do your planning right and it’s a powerful tool for quick decisions, rapid adjustment, and optimizing management.

So, what are the most common mistakes when writing a business plan ?  

1. Not planning

Too many businesses make business plans only when they have no choice in the matter. Unless a bank or investors want a plan, there is no plan.

Don’t wait to write your plan until you think you’ll have enough time. “I can’t plan. I’m too busy getting things done,” business people say. The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.

You can actually put together a Lean Plan in less than 30 minutes . Here’s a free downloadable Lean Plan Template to help.

2. Using a single static plan

Now more than ever, as we deal with the crisis of 2020 and 2021, stop thinking of the business plan as just a plan. That conceptual mistake blocks you from the enormous benefits of planning as a process, with regular review and revision .

Things change overnight. Assumptions disappear into the wind. Your business planning is where you keep track of all of the connections between tasks, spending, goals, changing assumptions, and changing markets.

A good business plan is never finished. When your plan is done, your company is done. Do a lean plan and keep it fresh.

3. Losing focus on cash

Most people think in terms of profits instead of cash . When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be.

We are trained to think of business as sales minus costs and expenses, which equals profits. Unfortunately, we don’t spend the profits in a business. We spend cash.

Understanding cash flow is critical. If you have only one table in your business plan, make it the cash flow table. Here’s a free cash flow template to help you get started.

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4. Skipping idea validation

Don’t overestimate the importance of the idea. You don’t need a great idea to start a business — you need time, money, perseverance, and common sense. 

Few successful businesses are based entirely on new ideas. A new idea is harder to execute than an existing one because people don’t understand a new idea and they are often unsure if it will work.

Plans don’t sell new business ideas to investors. Plans just summarize business prospects and achievements. Investors invest in people, and their businesses, not ideas. Investors buy into a business, with milestones met and traction and validation ; not just ideas.

The plan, though necessary, is only a way to present information. So make sure you’re ready to wow your prospective investors with your knowledge and leadership skills. Don’t expect your business idea — or the business plan you explain it in — to do the work for you.

Here’s our idea validation checklist — it can help you think through whether your idea is viable before you spend a lot of time and money on it.

5. Making the planning process overwhelming

Doing a business plan isn’t as hard as you might think. You don’t have to write a doctoral thesis or a novel. As we said earlier, the simplest Lean Plan is just a few pages of bullet-point lists, tables, and essential projections.

There are good books , many advisors among the Small Business Development Centers (SBDCs), and through the SCORE business mentoring program, business schools, and there is software available to help you (such as LivePlan ).

Don’t sweat the cosmetics. Focus on the content. What matters is what you plan, not how you write about it.

6. Spongy, vague goals

Leave out the vague and meaningless babble of business phrases (such as “being the best”) because they are simply hype.

Remember that the objective of a plan is its results, and for results, you need tracking and follow-up . You need specific dates, management responsibilities, budgets, and milestones. Then you can follow up. No matter how well thought out or brilliantly presented, it means nothing unless it produces results. This article on how milestones make your business plan real and actionable will help.

7. Assuming that one size fits all

Not every business plan needs to be the same. In fact not every plan should be the same. To find success, you need to tailor your plan to its real business purpose.

Business plans can be different things: they are sometimes just sales documents to explain a new business. They can also be flexible Lean Plans, detailed action plans, financial plans , marketing plans , and even personnel plans. They can be used to start a business , or just run a business better.

Develop the plan that best suits your business goals and don’t let the planning process get the best of you.

8. Diluted priorities

Remember, strategy equals focus . If you split your priorities you split your focus and will only have difficulties making any progress.

Starting with a priority list of three to four items is the focus. A priority list with 20 items is certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.

9. “Hockey stick” shaped growth projections

Sales grow slowly at first, but then shoot up boldly with huge growth rates, as soon as “something” happens. The only issue is if that’s your sole projection, you’ll soon find yourself in trouble.

It’s best to have projections that are conservative so you can defend them. When in doubt, be less optimistic. In fact, it may make sense to have multiple forecasts operating — one that acts conservatively, one that’s more optimistic, and another that reflects your actual performance. 

If you’re unsure of where to start, here’s how we suggest you create your sales forecast .

10. Not paying attention

We’ve seen it again in 2020 — planning works best as a process. In order to navigate volatile environments a lean plan, regular reviews, and revisions as needed are necessary. It’s not about having the document, the business plan, that isn’t the goal. It’s about a system of planning that works like driving with a GPS.

You have the long-term strategy and goals as the desired destination. You have the major milestones and metrics as the recommended route. And you have regular progress reviews as the equivalent of real-time traffic and weather information.

Steering is a matter of frequent course corrections. Planning does that for you. If you’re not paying attention, and not adjusting to external factors, your plan is worthless.

11. Sticking to the plan

Contrary to popular belief, there is no virtue in sticking to a plan, just for the sake of sticking to a plan. There are plenty of cases where your initial plan is ill-informed, missing steps, or just ineffective.

Having a plan doesn’t mean you cut your options or reduce flexibility. Having a plan means you have a dashboard tool to show the connections and dependencies. It’s about being able to make the right changes fast. It is more flexible, not less.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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5 challenges you’ll face when drafting your first Business Plan

Posted by Sarah Cannata | Learn Magazine , Business Growth , Process and Procedures , Running a Business |

If there was one constant during my first year in business, it was that little voice in the back of my head. That voice I became an expert in pushing away or momentarily satisfying with: it’ll be okay, you’ll wing it. You know the voice I’m talking about… the one that busies your mind at 3am, shouting: YOU NEED A SOLID BUSINESS PLAN!!  

Finally, the penny dropped and I knew I had two choices:

• Continue winging it and hoping everything will be okay because up to that point, things had gone fairly well.
• Have the courage to do whatever it takes to draft a Business Plan that had all the right words and numbers staring back at me. A Plan that would help to see my dreams materialise.

You’ll notice I used the word ‘courage’ there. For me, it’s a big step to put my dreams down on paper and to prove why they’re possible and how I’m going to make them happen. I’m sure many entrepreneurs share this with me: I’m a real dreamer. When I was working for others, I still remember my very long commute each morning and evening (we’re talking 3 hours all up – on a good day!). I would stare out of the tram window and imagine myself doing something that wouldn’t just earn me a comfortable living – it would help others to transform their lives.

As I said, I’m the ultimate dreamer. There’s something rather intimidating about drafting your first Business Plan because while all of the dreaming in the world has you convinced your idea is great and financially sound, that Business Plan will not lie to you. The words on the page won’t mislead you and the numbers… well, as a wordsmith, I can’t say I’m a fan of numbers but at the end of the day, the numbers can’t lie to you.

What I also realised was that trying to fill out a blank template downloaded from a website, wasn’t going to work. I’d tried this approach before and failed dismally. So, just like an athlete who’s at the top of their game, I enlisted the help of Clive Enever, a business coach . Why? Because I knew his specialty lies in business planning and after our first chat, I could be sure he wouldn’t sugar coat anything and that’s exactly what I need.

Personally, I’ve gone through a range of emotions while working on this Business Plan and it’s important we’re all honest so that those experiencing similar things push on and don’t allow the stress to get to them.

So here are 5 emotions/thoughts/feelings I’ve had during the process:

• This thought: if I ever have to look at this Business Plan again, I think I’m going to be violently ill. Yes, this poor document has been through the wringer and I’m sure those living with me think I’m possessed as I tapped away at my laptop’s keys at all hours, re-writing and tweaking paragraphs continuously. Thankfully, I’ve settled on the version I have now.
• Then there’s that optimistic vibe: all of these words are just coming to me and flowing naturally. This is really going to work!
• Followed by the inevitable thud back down to earth. Um, I’m tired. Like really Doing and thinking about all of this in-between earning a living is hard and exhausting.
• And of course, that inevitable sinking feeling: this is a lot harder and complicated than I first thought.
• Finally, there’s this nagging question too: what if the numbers don’t tell me what I want to see? As someone who would rather sit through a horror film in complete darkness alone, at midnight on Friday the 13 th as opposed to look at an Excel spreadsheet, you can imagine how much this thought eats away at me.

Sure, this is all pretty honest but the transformation I’ve felt within myself since starting my Business Plan, really is priceless. Despite all of the fears and the moments when my mind screams at me, ‘go get a normal job like everyone else!’, I’m so relieved to finally have a solid foundation that tells what my vision is, what it looks like and how I’m going to actually make it happen.

If you’re fearful about taking that first step, trust me, take the plunge and you’ll be in a far better position business-wise and mentally because of it.

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About the author.

Sarah Cannata

Sarah Cannata is a passionate wordsmith – in addition to running her own professional writing business, Sarah Cannata Pty Ltd, she’s the founding editor of This Woman Can digital magazine, is a Huffington Post contributor and an Amazon.com international best selling author. She’s also been published widely on sites such as The Age, The Motherish, The Daily Muse, Women’s Agenda and has helped her PR clients to get featured on the likes of the ABC and SBS. After graduating with a Bachelor of Journalism, Sarah spent 6 years working in the corporate sector, honing her writing, marketing and PR skills. She is passionate about storytelling, supporting women in business brave enough to share their stories in a bid to uplift others and helping people to grow their bottom line with ease and reclaim power over their business, while celebrating their difference.

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Writing a Business Plan: A Guide for New and Experienced Entrepreneurs

For entrepreneurs, a business plan serves as a roadmap that outlines a company’s goals, strategies, and operational approach. It’s more than just a formality; having a well-structured plan can provide clear direction for decision making and increase the likelihood of long-term success.  

A full 93% of mid-sized business owners plan to obtain funding for new technology and equipment, showing the importance of long-term planning for a healthy, resilient business. Proactive preparation helps anticipate challenges, manage resources effectively, and align teams and stakeholders with a shared vision.

This guide breaks down the elements of a business plan, offering step-by-step insights for those looking to launch or grow a successful venture.

What is a Business Plan?

A business plan is a comprehensive document that sets out a company’s goals, strategies, and the steps needed to reach them. It serves as a roadmap, guiding businesses through each stage of their growth, from the initial idea to scaling operations. Typically, a business plan covers main sections, including market analysis, competitive landscape, target audience, marketing plan approach, and financial projections.

Beyond its role in securing funding, a business plan helps entrepreneurs change their ideas, evaluate market opportunities, and identify risks. It also serves as a tool for improving retention by aligning offerings with specific customer needs and adapting to market changes.

Benefits of a Business Plan

A solid business plan supports any company by enhancing decision-making, improving funding access, and building a competitive advantage. Here’s a closer look at its benefits:

Direction for Decision Making

A business plan sets clear goals and priorities, guiding founders and teams to make decisions that align with the company’s mission. This focused direction helps allocate resources efficiently and keeps the team on track, ensuring each choice supports long-term growth.

Attracting Investors and Funding

A well-structured plan demonstrates the business's potential to investors and lenders, providing a clear roadmap for growth and operational improvement, which builds confidence in its viability.

Operational Focus and Efficiency

With clear goals and detailed strategies, a business plan helps streamline operations by pinpointing gaps early and keeping the team focused on key customer engagement metrics and performance analysis. This alignment supports more efficient workflows and proactive decision-making.

Market Assessment and Competitive Positioning

A business plan helps you understand your target market and position your business effectively against competitors. It supports analysis of market trends and customer needs, guiding adjustments to improve market fit.

Resource Allocation

Teams can distribute resources more effectively, making sure that funds, time, and efforts are directed toward high-impact areas for growth.

Risk Management

Early identification of potential challenges prepares teams to manage risks and adapt strategies, strengthening resilience in a changing market.

How to Create a Business Plan

Crafting a business plan begins with a strong idea and builds toward a detailed, actionable strategy. Here are twelve steps to guide you through:

Step 1: Start with Your Business Idea

Begin by clarifying your core business idea, define what your business will offer, who it will serve, and what sets it apart. This step creates the foundation for your entire plan, aligning your vision from the start. If you’re a small business owner exploring options, here are business ideas to help inspire your next steps.

Step 2: Write the Executive Summary

Provide a brief overview of your business, including its purpose, target market, and goals. Summarize the highlights of each section to offer readers a quick snapshot of your plan. The executive summary should be concise yet compelling, capturing the essence of your business and demonstrating its potential for success. This section often serves as the first impression for investors or stakeholders, so make it impactful to encourage further interest in the detailed plan that follows.

Step 3: Define Your Company

Describe your company’s structure, mission, and vision, giving a clear picture of its foundational principles. Highlight what makes your business unique, such as a proprietary product, innovative approach, or market niche, and share any significant milestones or achievements that add to its credibility. This section should communicate your company’s identity and purpose, setting it apart in the eyes of investors, partners, and customers.

Step 4: Address Legal Considerations

Include the legal foundations of your business, such as your chosen business structure (e.g., LLC, corporation, sole proprietorship) and any required licenses or permits. Outline regulatory requirements specific to your industry, and detail any intellectual property protections like trademarks or patents. Covering these aspects helps prevent legal issues and reassures investors and stakeholders of the business’s compliance and integrity.

Step 5: Conduct Market Analysis

Research your target market thoroughly. Identify customer needs, analyze competitors, and study relevant market trends. This analysis helps you understand demand, pricing strategies, and areas for differentiation, setting a strong foundation for your business positioning.

Step 6: SWOT Analysis

In addition to market analysis, a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) provides a structured view of your business’s internal and external factors. Highlighting strengths, identifying areas for improvement, recognizing growth opportunities, and acknowledging potential threats creates a balanced assessment of your business’s position. This transparency strengthens credibility, demonstrating a realistic approach to navigating challenges and maximizing potential.

Step 7: Outline Organization and Management

Describe your business structure, ownership, and key personnel. Outline the roles and expertise of each team member, emphasizing their contributions to your business goals.

Step 8: Describe Products or Services

Provide details on your products or services, focusing on their unique features, stages of development, and how they solve customer problems. Highlight how these offerings can help capture market share by differentiating your business from competitors.

Step 9: Develop Your Marketing Strategy

Describe how you will reach and engage your ideal customer profile and attract potential customers. An effective marketing strategy builds brand awareness, generates demand, and helps capture market share. Outline your customer acquisition tactics, engagement metrics, and the specific channels that align with your target audience’s habits to show how these efforts will drive growth and sustain customer relationships.

Step 10: Draft a Funding Request

If seeking funding, specify your financial needs, intended use of funds, and expected impact on growth. Clarify your projections for returns on investment, showing how funding will drive a successful business.

Step 11: Prepare Financial Projections

Prepare a comprehensive financial projection covering revenue, expenses, and anticipated growth over the next three to five years. Presenting this data on a quarterly or yearly basis strengthens the demonstration of your business’s financial viability. Incorporating a break-even analysis within these projections further enhances your plan by showing when your business is expected to reach profitability—an essential metric for lenders and investors seeking assurance of your venture’s potential success.

Step 12: Compile the Appendix

Use this section for any additional documents, like team resumes, legal agreements, or product visuals, to provide extra context and depth.

Business Plan Formats

Business plans vary in length and detail, ranging from simple, one-page summaries to comprehensive, data-heavy documents. Choose a format that matches your audience and purpose here are some examples:

• Traditional Plan : Detailed and thorough, this format is ideal for complex businesses or when seeking significant investment. It includes in-depth sections on financials, market research, and competitive analysis.
• Lean Startup Plan: A shorter, focused document, helpful for quickly evaluating feasibility and developing small business ideas. This format highlights core assumptions and metrics to track early progress.
• One-Page Plan: A concise overview that summarizes points on a single page, suitable for early-stage planning or quick presentations. It’s the best way to communicate necessary information without overwhelming detail.
• Operational Plan: Primarily used internally, this format focuses on day-to-day operations, helping teams stay aligned on tasks and timelines. It includes specifics on staffing, workflows, and resource management.
• Growth Plan: Custom for expansion, this format includes strategies for growing operations, entering new markets, and increasing revenue. It also includes projections and market insights to guide the company’s future direction.

Common Pitfalls to Avoid When Writing a Business Plan

The strength of a business plan often lies in avoiding typical missteps. Make sure to be mindful of these pitfalls:

Overly Optimistic Projections

Projecting high revenue without factoring in potential setbacks can lead to unrealistic expectations. Expenses often rise unexpectedly, and without a buffer, financial stability can be at risk. A balanced approach to projections helps create a more sustainable financial outlook.

Ignoring Market Research

Market fit is fundamental for success. In fact, 42% of businesses fail due to a lack of market fit, highlighting the importance of thorough research as it uncovers trends and competitor strategies, helping to change your approach.

Forgetting Customer Retention

Strengthening customer relationship through retention drives sustainable growth. Loyal customers often generate more long-term revenue than new ones, making retention a strategic focus. Regular engagement and feedback collection from these customers can also inspire meaningful product improvements.

Lack of Flexibility

A rigid plan can become outdated as markets and customer needs change. Building in room for adjustments allows the business to adapt to changing conditions and new insights. Flexibility also helps in responding quickly to unforeseen challenges or opportunities. An adaptable plan keeps the company aligned with current trends and customer expectations.

Underestimating Financial Needs

Misjudging initial financial plan and ongoing funding requirements can derail operations. It's important to estimate realistic financial needs, including reserves for unexpected costs, to ensure adequate resources for growth and stability.

Overlooking Competitive Analysis

Focusing solely on your own offerings can blind you to competitors’ strengths. Understanding competitor positioning, pricing, and weaknesses allows for smarter differentiation and helps in capturing market share effectively.

Weak Marketing Strategy

A lackluster marketing approach can stifle growth, regardless of product quality. A well-defined strategy that targets ideal customers with the right channels is essential for brand visibility and customer acquisition.

Neglecting Team Dynamics and Culture

Overlooking the importance of team structure and company culture can impact employee retention and productivity. Aligning team roles and fostering a supportive culture contributes to long-term stability and operational efficiency.

Turning Plans into Actions: Steps for Meaningful Growth

A well-crafted business plan is more than just a tool for investors; it’s a comprehensive guide that aligns your strategies with customer satisfaction and high-quality service. The feel, felt, found approach can add depth to your planning, helping you empathize with customer concerns, offer solutions and adapt to changing market demands. Through detailed planning, you can better predict challenges and develop solutions that strengthen customer trust.  

A solid business plan serves as a roadmap for assessing progress, adapting to change, and driving sustainable growth. It’s an investment in resilience, helping you set clear priorities, make informed decisions, and build stronger connections with your customers. Starting fresh or refining an existing approach, a well-defined plan keeps you focused and prepared through each stage of growth.

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13 Common Business Plan Mistakes to Avoid in (2024)

Business Plan Checklist

• June 1, 2024

Do you remember the first mistake you made creating a business plan? 

If you smiled a little, great. It means you’ve overcome it, and you understand that entrepreneurs make business plan mistakes all the time—and continue to learn from them.

However, there are certain mistakes no business owner should make in their plan to achieve their dreams.

So, in this article, we’ve listed 13 common business plan mistakes you can avoid to get ahead in the game. But before we dive in…

What is the biggest mistake when creating a business plan?

One of the most grave business plan mistakes is having no business plan!

With no business plan, what’s your purpose, and how will you let the world know your intentions? 

You don’t necessarily need to put it down on paper. But there has to be some kind of planning. Much like a north star, planning will give you direction.

Moreover, investors or clients will want to see a plan sometime down the line. Clearly, planning and documenting the plan is inevitable.

So, create a business plan. It can be a one-page business plan or a detailed one—either way, it’ll capture the essence of your vision.

13 common business plan mistakes to avoid

Now that you know you can’t escape a business plan, let’s check out the mistakes you can escape while creating a solid business plan:

1. Poor planning

The business of business planning is no joke. You can’t have a business plan in place just for the sake of it.

It has to have value—information that shows product or service viability, company details, projections, etc.

Why? Poor business planning can imply that:

• Your great idea isn’t so great because you haven’t thought it through.
• You don’t care enough, which can be unattractive for investors and banks. (You don’t want to miss out on the money.)
• You’ll witness scope creep, where stakeholders may want to add new objectives even when the project is underway. ( Not fun, is it? )

So, spend time planning, and you’ll naturally make fewer mistakes.

2. Poor executive summary

You and your business have 7 seconds to make an excellent first impression. Since an executive summary is the first impression, you don’t want to gamble with its quality.

A poor executive summary will instantly make clients and investors disinterested in your business plan—a big mistake.

So how do you fix it?

First, make it straightforward so anyone without a business background can get a clear understanding of your business idea.

Second, ensure it’s concise. Briefly mention all the important information, including:

• Business purpose
• Company description
• Market analysis
• Business goals, competition
• Financial plan

This will keep your clients or investors interested in learning about the rest of your business plans.

Lastly, don’t be shy about your intentions.

Is your focus on securing enough money for business operations? 

A bad executive summary can be worse than having any executive summary

Ensure to include your cash flow table, the money you wish to borrow, and the financial projections to back up your success claims. This way, investors know you mean business and appreciate transparency right off the bat.

3. Targeting the wrong audience

Obviously, your business doesn’t target everyone in this world. So, define your target market and potential customers. This way, you can write using the vocabulary and tone that best resonates with them.

After all, you want them to understand what your business is about.

However, that’s not enough!

When you write a business plan , you also want to show your work on how you decided on your target market and how you plan to appeal to them. This is more to impress your potential investors.

4. Not doing enough research

When you create a business plan without enough research, you’re hampering your success even before you’ve started your business.

• Imagine being unaware of your target market or closest competitors.
• Imagine having yet to think of the most obvious and effective marketing strategy.
• Imagine having an outdated sales technique.

Now, imagine potential customers or investors realizing these research gaps in your business plan.

One word: Nightmare!

It only shows you’re not prepared.

Hence, remember to carry out in-depth research so there’s nothing that can discredit your business idea.

5. Unrealistic financial projections

Another common mistake is to be unrealistic or overconfident about your earning projections.

Being unrealistic shows that you either don’t understand your business or aren’t qualified enough to make accurate projections.

The result? Banks and lenders won’t trust you or your business idea.

Moreover, unrealistic financial projects are also your one-way ticket to bankruptcy.

So the point is: Be as realistic as possible to gain inventors’ trust and launch a successful business.

6. Ignoring the competition

A good, detailed business plan never ignores competition because there can be serious consequences.

Here’s everything you can’t highlight without proper competitive analysis :

• What makes you unique?
• What strategy will help you beat your competitors?
• How will you grow your credibility?

These aspects are important for your business to avoid becoming complacent and convince investors and partners that you can survive in this saturated market.

7. Poor marketing strategies

Poor marketing strategies can hurt your own company in many ways, including:

• Reduced sales or profit
• Increased expenses
• Market your product or service to the wrong audience
• Confuse customers about your brand and business idea
• Drop in product or service prices resulting in financial loss
• Lose customers to competitors

Scary list, isn’t it?

These pitfalls are why you shouldn’t make the mistake of creating lousy marketing strategies.

8. Not highlighting your team’s unique skills

Many entrepreneurs make this mistake because they often forget the company isn’t just them but their team and what they bring to the table.

So, it’s only right to mention the experience and skills of their top team in a business plan. They should also include how their team plans to achieve the business goals and overall success.

9. Poor writing and presentation

Imagine presenting a business plan with serious ideas, ambitions, profit predictions, etc. But uh-oh . You notice the spelling of ‘projections’ is missing a ‘j,’ and the color scheme is off on one of the pages.

This is a major red flag and an embarrassing mistake that can cost potential clients!

Don’t worry, it’s fixable. Just double-check your spelling and proofread like your life depends on it.

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10. Incomplete or missing information

A business plan is your business’s backbone. Missing any important information is like missing a disc in the spine. You’re bound to crumble.

The solution? Check your business plan multiple times to spot such mistakes.

Let others take a look as well. A fresh perspective can spot more missing information.

11. Adding too much information

Less is more. A cliche you want to employ while writing a business plan.

Investors want a clear understanding of whether you understand your business thoroughly. They can do that with just a few crisp pointers in your business plan.

In fact, visuals speak more than words. So, incorporate charts and graphs to reduce the wordiness and get your point across.

12. Being inconsistent

Focus on the consistency of your business plan’s key elements and all sections.

You don’t want to say your company predicts x amounts of profit in the executive summary only to mention y amounts of profit in the financial projections section.

Such inconsistency will only show under-preparedness to your investors—a major red flag.

13. Unclear exit strategy

A clear exit strategy is almost like a medical cover you ought to have.

When things go south (business struggles), you can’t limit your losses without a clear exit strategy.

There’s also an upside to this strategy. If your business booms, you profit significantly by selling your company shares. Either way, you’re covered!

How a business planning tool helps you avoid mistakes

Let’s just say a business planning software like Upmetrics makes everything so much easier and faster. Here’s why it’s a powerful tool:

• It helps entrepreneurs start with a basic business plan structure so they don’t miss the most important sections in their plan.
• The AI automates your business plan creation so you don’t have to worry about inconsistencies across the different sections.
• The AI can auto-write the different business plan sections in your preferred tone and style so you sound professional.
• AI-powered financial forecasting tool helps prepare accurate and realistic projections, ensuring you don’t under/overestimate them.
• Industry-specific business plan templates ensure the inclusion of industry-relevant research and marketing strategies.

Making mistakes during the planning process is only natural. But now that you know some common mistakes, you can speed up your process without making the most common and critical ones.

But what if you could speed up your business plan creation in under 10 minutes? It’s possible with an AI business plan generator .

A modern tool like Upmetrics can simplify business planning with its intuitive user interface, AI-powered features, and step-by-step guidance.

Try Upmetrics and don’t make mistakes that others do!

Build your Business Plan Faster

with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

Can business planning software help me avoid mistakes.

Yes, absolutely. Business planning software like Upmetrics offers industry-specific business plan templates, saving you countless hours and avoiding errors like missing information and inconsistencies. Upmetrics’ AI can also fine-tune your content, creating a professional and factually accurate business plan without grammatical errors.

Where can I find templates or examples of successful business plans?

The first option is Google search, where you’ll find many business plans and templates to write a successful one. The second, more effective option is to try business plan software. They typically offer numerous business plan example options and templates so that you can pick and customize them depending on your business type.

How long should my business plan be?

Typically, a good business plan is between 15-30 pages . However, depending on your purpose, product or service type, and target audience, you can have a one-page business plan or a 100-page one.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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The Most Common Business Plan Pitfalls and How to Avoid Them

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Every company benefits from an updated business plan. While it seems necessary for start-ups, it applies to established firms, too. An efficiently written business plan keeps the whole business on track in the process of execution of the company’s strategy and reaching its business goals. Business plan mistakes can result in anything ranging from small oversights to fatal errors for your business. It is even more important for the business who are at the funds raising stage, so the information they provide is accurate and none of your ideas are misleading and are in tune with the current market. To help you avoid your business plan from being discarded, here are some of the critical business plan mistakes to be careful with:

• Long and bulky Executive Summary The readers of business plan such as investors, bank institutions and key vendors start considering your business idea from reading the executive summary. Executive summary is a highlight of the most important items of your business plan in a concise but informative way. It should succinctly describe your compelling story on how a highly skilled team will deliver products or services to precisely defined target markets based on a consistent strategy. Besides, it should state the company’s value proposition on how their products or services will change the life of its customers for the better in a profitable way. In fact, many executive summaries are boring and state some business idea whose execution remains vague. Often, it is presented as just cut and paste of some sections from the introduction and some other parts of business plan. Therefore, there are high chances of the busy investor to move on to the next proposal, if executive summary does not provide a clear, convincing, and persuasive overview of the business.
• Attaching your value proposition to dated technology or dwindling markets When formulating in your business plan the opportunity you see for a product or service, you need to question it and can’t just assume that the idea has automatic demand in the real world. A professionally written business plan will assure you are setting up your business for success. This implies that you must develop a value proposition of your product or service that will change an emerging or existing market. Those markets that are shrinking or are being replaced by new industries will make it incredibly challenging for you to get funding. For instance, what would your reaction be if someone developed waterproof ink for typewriter ribbons? You wouldn’t necessarily be amazed, because the number of people looking to buy something like that is miniscule.
• Not knowing the target audience and segments A product or service that is everything to everyone does not exist. If that were so, we would all be using the same phone. In fact, your product or service is specific and advantageous to an ideal type of customer. Without defining your target market, you cannot reason how you will handle the fierce competition. There are competitors who are providing the same product and service. Investors trust their funds to companies that have completed and gained a complete knowledge of primary and secondary market. You must define your target market and outline how you will target this audience.
• Having unrealistic and aggressive growth projections Having read the executive summary, many investors jump straight to the financial section of the business plan. It is important that the assumptions and projections in this section to be realistic. Plans that show sales forecast, operating margin and revenues that are poorly reasoned, internally inconsistent or simply unrealistic significantly damage the credibility of the entire business plan. In opposite, sober, well-supported financial assumptions and projections communicate operational maturity and credibility. Benchmarking is an especially useful tool to use in your financial analysis. By comparing and basing your projections on the financial performance of public companies within your marketplace, you can prove that your assumptions and projections are achievable. Planium Pro makes your life easier in that regard. Finance section of the Planium Pro’s software provides an easy and quick benchmarking tool for a variety of industries so you can efficiently measure your projections and key ratios against your market averages.

• Acknowledging your competitors, but not researching them Many new businesses are too much inward-focused. Being confident about your product or service is certainly a good attitude. But there is risk that this could twist your idea of how it correlates with products and services of competitors who have been in the market for some time. Besides, quite often entrepreneurs also miss or underestimate the possibility of new entrants who could increase competitive pressure. Our recommendation is to learn as much as you can about the people you’re going up against and perform Competitor Analysis, based on their pricing, quality, service and distribution channels. Knowing this information helps you prepare your own strategy to differentiate your business from theirs.

Next Steps • Keep these critical mistakes in mind when writing your business plan. • If you have already started writing your plan, use Planium Pro software to ease your preparation and streamline the process. Join our Planium Pro to see all the benefits yourself. Read More We would be interested to receive comments from small-business owners on what mistakes you have made in business plan writing and how you fixed them.

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