Business Plan Problems

Identifying a company's goals is essential to writing a business plan.

The business plan can make or break an idea. If vital pieces are omitted or handled poorly, investors will quickly move on to the next budding entrepreneur. By adhering to time-tested principles and avoiding common mistakes, business owners can earn the second look that may lead to the funding they need.

Features

A business plan should include a synopsis of the business itself as well as its customers and competitors. It should explain the market and potential return on investment in a straightforward and comprehensive way. The plan also should include a detailed explanation of exactly how the business can become profitable and provide a realistic time frame for reaching the company's financial goals.

Warning

Beginning entrepreneurs often forget the importance of first impressions when presenting their ideas. The executive summary is the most important part of a business plan, according to the U.S. Small Business Administration. The summary communicates what you do and your view of the future and is the first thing an investor will read. Do not get too lost in the details and forget to spend adequate time crafting an attention-grabbing summary.

Solution

Savvy investors are skeptical of unrealistic promises. When projecting the expected profit of a new business, you should provide objective information about the payoff. Avoid focusing on financial projections that can only be achieved under ideal circumstances. Instead, present a set of possible scenarios that range from optimistic to likely to conservative.

Considerations

The Small Business Administration outlines topics for entrepreneurs to consider to help them overcome common business plan problems. The administration recommends understanding the need that your company meets, identifying your customers and developing fund-raising ideas.

References

• SBA: Writing a Business Plan: The Executive Summary
• SBA: Business Plan Basics