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In this article you will find some of the most common mistakes made by business owners in their planning phase. Business plans are the foundation of companies, and they are an absolute necessity. After reading this, you should be aware of these mistakes & never commit them or your business could fall right in front of your eyes :

1. Procrastination :

Don’t wait until the last minute. Businesses often delay their planning until it is absolutely necessary to do so. Unless their investors want a plan, it’ll probably never happen. Even if you’ve bought an already successful company, a plan is absolutely crucial to continuing its success.

The busier your life is, the more important a plan is. Many often make excuses such as “I don’t have time” or “I’m too busy with other things”. They don’t realize the importance, and this is the turning point of their business. An example of this is the person putting out fires. He was always putting out individual tree fires, but he was too busy to notice that eventually the whole forest would be burned down. Instead of working on 1 tree at a time, he could have stopped it all by simply building firebreaks.

2. Casual Cash Flow :

In terms of importance, a steady flow of cash is absolutely important to have, more important than things such as profits & sales. When starting a new business, the typical thing to do would be think about the cost of start up, cost of producing your products, how much it sells for, and the profits. We usually think about business as the sales – costs & expenses, which would equal a profit. Too bad we don’t spend “profits” in business. We spend cash. If you’ve only got time for 1 table, make it a cash flow table, because it’s the most essential part of a business plan.

3. Inflating Your Ideas :

People sell ideas to investors, not plans. Although necessary, the plans is merely a way to present your information. Your ideas alone won’t be able to get you investors.

Don’t make the mistake of making an idea the highest priority, especially trying to make it unique. A great business doesn’t require a great idea; it requires money, perseverance, research, common sense, and time. You won’t usually find businesses that are completely built off of their ideas. Selling an existing idea with a twist on it is far simpler than selling a completely new idea, because investors won’t understand your idea completely and often doubt its success.

4. Fear :

Fear sometimes drives people over the edge. Don’t be afraid. Business plans are easier than you think. Its not like you’re writing a novel or an essay. There are many available resources such as software & books to help you make a business plan.

5. Vague & Meaningless Goals :

When thinking about goals, try to leave out those pointless phrases that have to do with being the best there is. The purpose of a plan is to get results. You need to track those results, and make sure you’re succeeding. No matter how well thought-out a plan is, its worthless without results.

6. Priorities out of order :

You must keep in mind your priorities. Strategy is focus. If you have a priority list with 3-5 items, that’s focus. If you have a list with 30 items on it, that’s definitely not strategic, and often ineffective.

Posted by pouya / Uncategorized