Common Business Plan Mistakes
There are some common denominators to business plan snafus that are easy to commit. Here are some reasons to have someone review the business plan before sending it out to third parties.
We all want our children to be successful, but projecting a 2.5 B revenue increase in one year is perhaps a bit too optimistic. Scale it back a bit and you are more likely to score funding. Other rosy projections take the form of unrealistic payroll projections where everyone is willing to work for minimum wage or work 14 hours a day without overtime. Be real about your goals. It’s okay to have aggressive goals; just not impossible ones.
Math is Hard
The financial statements, projections and the plan itself do not agree. This is more common that you think it is. Some people will spend months on a business plan, but not check the final presentation for basic items. Let it sit for a day. Reread and tie out the numbers once more. Even a dollar rounding error will cause your application to be round filed. An investor might think; if there are simple math mistakes; perhaps there are more lurking below the surface.
Numbers don’t match, formatting is unreliable, and whoa; what’s that semi colon doing there? Some mistakes that I’ve seen.
- The year 20,000 instead of 2,000.
- The table columns don’t have consistent formatting. One column might have rounded numbers. The next column has three digits after the decimal.
- Management Bios for people who are no longer with the project.
- Using Facebook pictures for management bios instead of professional picture.
- Graphics are located in the margins.
- Cut paste of graphics with irregular margins. This usually happens when business plans are printed on non-white paper/background. It ends up looking like a fifth grade art project. If you don’t have clean edges, use a white background to mask the issue.
- Repeated sections. This is common in the executive summary and the detailed sections. At time, the executive summary is posted word for word in the detailed section. You need to be a bit more verbose in the detailed sections. If you are going to copy the summary, why even have a detailed section?
- Upside down graphs and tables.
- Spelling mistakes.
- Clashing graphics.
- Grammar mistakes.
- Text doesn’t match the tables/financial statements.
Getting Crazy with the Graphics
I’ve noticed a trend lately. now that just about anyone has a basic photo editing software, like Picassa, there are a few that insist on jazzing up their business plans with outrageous graphics.
Before you get started with the instagram filters, remember that a business plan is quite likely going to be photocopied. Your memorizing sunset picture might turn in a giant blob. Pick colors and graphics that will not lose their shape if photocopied. Or even make them black and white.
Not lining up the graphics on a grid. Word is a wonderful program. However, it doesn’t really do a great job of aligning graphics. They will probably start mish mashing and wandering if you have more than a few. First, turn on the paragraph tool. It will show you all the hidden commands that are messing up your work. Fix those and 80% will be fixed.
Most successful business plans are photocopied. If you put them in an expensive binding system, remember the poor clerk who has to undo your binding. If they photo copy it poorly, it will end up looking like a shadow of itself. Or you could also provide a nicely formatted PDF copy as well.
Table of Contents
Some might argue that a Table of Contents takes up valuable space in a business plan. Others might remember that the plan might be scrutinized by someone who might toss their plan if it doesn’t have this basic ingredient. If this is a huge issue for your group, consider if a Lean Plan is more appropriate at this time.
No. There are some cultures where it’s acceptable to write in all caps for emphasis. It’s not that way for the United States. I’ve seen this in emails, reports, websites and other business correspondence. Just tone down the all caps yelling and more people will read your proposal.
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