Business Plan Mistakes to Avoid
It doesn’t matter if a small business is just starting out or expanding - there are several critical mistakes businesses can make with its business plan to sidetrack success.Sunovis Financial assists small businesses with lending needs, and offers guidance on all aspects of the process, including the business plan preparation.
A business plan is one of the main factors that investors and lenders use to decide if a new business is worth the investment consideration. A poorly crafted business plan is a certain path to failure when looking for financing, so be sure to avoid these 5 critical business plan mistakes:
1. Aiming too low or far too high in projections. It doesn’t matter if the company is projecting market share, sales, profits, or growth. If projections are too low, potential investors and lenders will question the credibility of the business. It is normal for people to be conservative in their estimates when constructing a business plan, but remember that being too conservative could run the risk of being discounted. Present the most realistic numbers possible.
2. Using numbers that are obviously wrong. When presenting numbers for profit margins, general expenses, development costs, and sales and marketing expenses, have them checked by a CPA for accuracy. The numbers you use should be in line with standards for your industry. Using proper financial measures will let lenders and investors know they can trust you to manage the business properly.
3. No editing or proofreading. As with any document, your business plan should be proofread and edited. Grammar and spelling mistakes have no place in a proper business plan. More importantly, you should find someone who is familiar with business plans to correct any obvious omissions or errors. An experienced entrepreneur, industry expert or company that specializes in business plans should be considered.
4. Using inappropriate or poor visual elements. Focus on the message and the use of charts, graphs, diagrams and pictures that will add to and clarify your message.
5. Improperly formatted. Before you write and submit your plan, make sure you know what the investors and lenders are expecting. It does you no good to submit a 3 year business plan when investors are expecting a 5 year plan. Make sure you know your industries standards for business plans and follow that.
A well crafted business plan can mean the difference between obtaining the financing you need and alienating potential investors and lenders. Take some time to understand what is expected and you can avoid common mistakes in your business plan.
About Sunovis Financial
Sunovis assists borrowers and small businesses with their lending needs. The motto of Sunovis Financial is to help rebuild the US economy, one business and one loan at a time.