Scared Of Making Business Planning Mistakes? Avoid make these 8 Critical Errors!

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The creation of a business plan is not an easy task, a lot of entrepreneurs and new business owners do struggle. Business plans consist of numerous modules and sections, all providing different pieces of information that relates to the strategic planning of the business. Business plans are generally the first step new business owners take. With this inexperience, several mistakes can be made. Out of all the mistakes that are made, outlined below are the top 8:

1. Attempting to complete the planning procedure in one go. For an unknown reason, several entrepreneurs naturally attempt to finish a business plan in a single session. By no means is this the right way to go about it. The best way to describe a business plan, is like a set of building blocks. The truth is that you can start anywhere and get the ball rolling. Attempt the part that provides the most immediate benefit and progress from there.

2.Being mislead from the reason for the plan. – The key purpose of a business plan is to plan, it is not just a document. The key mistake that is made by many business owners, is that they create the business plan as a foundation document for the business, and think that is its function, this is not the case, it is a key document to look back on at all times and review the business progress and to make sure they are going down the correct path.

3.Often the plan is left unfinished. This is one of the most mistakes, as an incomplete business plan is useless, an entrepreneur that makes this mistake, is open to a wide range of risks. An incomplete business plan can be considered useless. An incomplete business plan is one that doesn’t consist of all these significant modules: Your customers, products, operations, marketing strategies and sales, your management team and your competitors. A complete plan should also include a discussion of the industry and its trends.

4.Keeping your business plan away from your team. Often, managers keep the business plan to themselves, when they should be sharing it amongst his team. A business plan is management tool. Evidentially, there are some aspects of the business plan, that managers and business owners should keep private, however there are many areas that can be seen by the team. A business plan can perform as a team morale builder and create peer collaboration. But in order to achieve this, a manager must ensure that their team are aware of the goals and strategies of the business.

5.Cash and profits are often mixed up. – Believe it or not, there is a huge difference between the two. Cash flow is a lot more important than profits because profits are an accounting concept and cash is money in the bank, you do not pay your bills with profits. Mixing the two could place your business in a very unstable financial position.

6. Diluting your priorities. Producing lists of priorities that are very long in number, is a critical mistake. This can often cause dilution. By condensing your priority list to below 5, will give you business plan focus and drive. Also, by having a plan with fewer priorities, it allows a greater understanding amongst your team.

7.Relying on your business idea, rather than your business. – Over-valuing your business idea is criminal. If you do this, you will learn business failure the hard way I’m afraid. A business idea and the business that it is built on go hand in hand. Neither is more significant than the other. You must ensure that you write a business plan that shows you building a business that supports your idea.

8.Unrealistic forecasting. – For a business plan to be considered a valuable resource to the business, the forecasts must be realistic. In the event of calculating unusually high profitability figures for instance. A business will see this increase in profits as an opportunity to grow etc. And realistically, if this decision is made, and the profitability figures aren’t as expected, the business will be in a very unstable sitaution.

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