1: A dead document
A business plan that is created for a purpose and then discarded will always become obsolete fast. Making your business plan a living document is essential if you don’t want the whole process to be a failure. Only a regularly reviewed and updated plan can be the spur to look critically at your company on a recurring basis.
Most business plans are over-optimistic, especially with regards to predicted sales – often massively overestimating the size of the market. Research your market thoroughly. Too many business plans include a SWOT analysis, but concentrate on the strengths and opportunities and ignore the threats and weaknesses.
3: Ignoring the competition
Business plans commonly assume that the competition will make no competitive response or indeed, will have no new initiatives of their own. Study your competitors and try to second-guess their plans. A living document will take into account their actions.
4: New or old?
Too many business plans depend on doing something new, when what is needed is to find a better way of doing what is being done now.
5: Ignoring risk
What are the risks attached to the plan? Think through these and the costs of failure as well as the rewards of success.
6: Profit or turnover?
Remember the old adage: turnover is vanity, but profit is sanity. If expansion is planned, it should result in increased profits, not just sales. Expansion requires finance, people and other resources. Do you have adequate resources?
This post was brought to you by Claudia Graham at Companies Made Simple
Keep up to date. Subscribe to our RSS