Most small and medium businesses don’t do any form of business planning. There is no disputing that business plans play an essential role in the small business growth journey, as well as being essential tools in getting accreditations, investors and loans. Where utilised, business plans can transform a small business from a trial-and-error business management style, to one of clarity and certainty.
Sometimes, business owners are required to write a business plan for some kind of application-think bank loans, visa sponsorships, licences or finance. Most of the time, that means the owner or senior team member will put the plan together themselves. Unfortunately, for many small businesses, the process is often quite a haphazard and unprofessional practice. If your plan is being used for an application, it is going to be turned inside out, so you need to make sure it is accurate and a strong representation of your business.
So here are the most common business plan blunders, and the easy solutions to overcoming them.
1. Your plan is not written for the audience.
Business plans for specific applications need to include specific information to enable the assessment of your application. Those approving your application will have seen many plans before, so it’s essential they get a strong sense of you and your business immediately when reading your plan. That could be a bank employee, council or authority and often there are specific formats and templates that you need to follow, to make that easy for the assessor. Know what they want.
2. Research and detail is poor.
Often business plans are developed by business owners who have just written what they know with information off the top of their head, without any external research. In plans where there is research, it’s often from low quality sources and not referenced. All information in the plan needs to be well researched and all referenced.
3. Poor formatting
In order to present your business in the best possible light, everything in the plan needs to be extremely tight: consistent fonts, styles and sizes, no spelling mistakes and easy to read. As part of your business planning process, have someone else review the plan to check readability, spelling, grammar and formatting.
4. Assumptions incorrect or not explained.
Business plans create a vision for the future of your business, so there will be many assumptions. As you are working in your business, you know exactly what is going on and have a lot of assumed knowledge. But for your reader, they will know nothing about your business, so everything needs to be explained very clearly. Again, an external reviewer can quickly point out the areas that need editing and clarification before you finalise the plan.
5. The story is inconsistent
In your business plan, you will tell a story about your business, so that story must be complete and consistent. As you write the plan, cross check each section against each other so it matches. Missing or inconsistent information raises red flags with the reader, alerting them that you have not considered all factors.
6. Not realistic.
Keep the description of your future business reasonable and on the conservative side. Your reader has already seen all sorts of crazy ambitions and over-hyped projections, but these are seen as unrealistic — causing the whole plan to lose credibility. Use your past trading data and performance to justify your assumptions; if you are a new business, refer back to industry averages.
7. Not taking it seriously
Business planning is a useful exercise, whether you are doing it for an application or just for yourself. As with anything you want to do in business, it requires skills and knowledge to get the best outcome. A business plan — if you want it to mean anything — is not just a collection of regurgitated data and information cobbled together as an afterthought. If you are struggling, don’t have time, don’t know what to do or aren’t doing any planning at all, get help. There are professionals out there that write plans every day and can simplify the process, produce a significantly better product and increase your chances of the outcome you are seeking.
Related: Getting ready for small business finance : how to write your business plan for loans.
