Commonly made mistakes in Business Plans

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Commonly made mistakes in Business Plans

  1. 1. 1Commonly made mistakes in Business Plan | www.dessenceconsulting.comCommonly made mistakes inwriting Business PlanHow to avoid these mistakes
  2. 2. 2Commonly made mistakes in Business Plan | www.dessenceconsulting.comYou have got a wonderful business idea and you are writing Business plan. There are manyelements that make a good business plan. It often takes time, patience and many revisionsbefore you get it right. Unfortunately when rushing to get your funding in place and launch yourbusiness, your plan can get neglected. Below we have highlighted a few of the very commonmistakes made when writing a business plan• Procrastination :- Delay• Too Much Information• Hiding Weaknesses• No clear business model• No real Assessment of Risks• Financial Projections• Hockey-stick shaped growth projections• Generalized Market Size• The Big Deal• Distribution Channels• Ccompetitors AnalysisMistakes can be avoided!!Commonly MadeCommonly MadeCommonly MadeCommonly Made Mistakes in Business PlanMistakes in Business PlanMistakes in Business PlanMistakes in Business Plan
  3. 3. 3Commonly made mistakes in Business Plan | www.dessenceconsulting.comProcrastinationMany business owners under estimate the time & effort required to write a business plan. Dontdelay. If your organization is not functioning as desired or you need capital in six months, now isthe time to put it together .Too Much InformationObjective is to focus on key elements of the plan & make your case as succinct as possible. Pagesof detailed information can be put in an Appendix and referenced when required.Hiding WeaknessesMost Business plan writers think• Why draw unnecessary attention to negative aspects• If we ignore the weaknesses, they may go away• Once we get funding, we can deal with the problematic areas• What investors dont know wont hurt themIf there is a weakness in your business model or Plan the savvy investor will find it withinminutes. Once this blunder is uncovered it is obvious that you havent been completely forth-right.Delay and hiding weaknessmay cause Investors to runaway.Commonly MadeCommonly MadeCommonly MadeCommonly Made Mistakes in Business PlanMistakes in Business PlanMistakes in Business PlanMistakes in Business Plan
  4. 4. 4Commonly made mistakes in Business Plan | www.dessenceconsulting.comNo clear business modelYou may have an idea but the business model that you would be following needs to be explainedin clear precise words, such as how will you make money, what is the path to profitability etc.Very often writers also loose focus while writing Business Plans, thus it is essential to have a clearfocusFinancial ProjectionsYou should be able to provide some rationale as how your projections were put together. Datathat is inconsistent with industry norms and overly aggressive should be avoided.Hockey-stick shaped growth projectionsHave projections that are conservative so you can defend them. When in doubt, be lessoptimistic.Generalized Market SizeClaiming your market size as huge will lose credibility of your plan. In the future you can targetdifferent segments but for now focus on specific segments you can serve effectively.Clear precise words,conservative projections leadto a winning business plan.Commonly MadeCommonly MadeCommonly MadeCommonly Made Mistakes in Business PlanMistakes in Business PlanMistakes in Business PlanMistakes in Business Plan
  5. 5. 5Commonly made mistakes in Business Plan | www.dessenceconsulting.comCommonly MadeCommonly MadeCommonly MadeCommonly Made Mistakes in Business PlanMistakes in Business PlanMistakes in Business PlanMistakes in Business PlanNo real Assessment of RisksRisks are normally outside the realm of your business. An assessment of what market forces arethere that could prevent your plan from being successful in the futureAssessment of Risks: Description of Risk• Cost Overruns in R&D and Production• Failure to meet production deadlines• Problems with Suppliers and Distributors• Sales Projections not attained• Unforseen Economic, Political,Social,Technological Developments• Competitive Price Cutting• Unforseen industry trends• Capital Shortage• Cyclical Fluctuations• Other RisksNo Risk Assessment is lastmistake you should make
  6. 6. 6Commonly made mistakes in Business Plan | www.dessenceconsulting.comThe Big DealYour business may have signed a big contact with a major Client and over-emphasis of this dealcan be viewed as a weakness. If 80% of your revenues are based on a one-company contract,your company could tank if the deal goes bust. Highlight that your company is adept at winningbig contracts or forging strategic partnerships and this skill will be utilized to diversify the clientbase.Distribution ChannelsHow the product / service reaches the market is an important aspect of the business plan. Resistthe temptation to cover all modes by listing every channel possibility it just shows that you lack achannel strategy.Competitor AnalysisListing names and addresses of your competitors is NOT a competitive analysis. The investor isinterested in knowing what you see from your competitors in the near term; their strategicdirection, core competencies, why do customers opt for them, their weaknesses and if they canbe exploitedBe precise and realisticCommonly MadeCommonly MadeCommonly MadeCommonly Made Mistakes in Business PlanMistakes in Business PlanMistakes in Business PlanMistakes in Business Plan
  7. 7. 7Commonly made mistakes in Business Plan | www.dessenceconsulting.comContact UsContact UsContact UsContact UsD’Essence Consulting303, Aar Pee Center,11th Road, Gufic Compound,MIDC, Andheri (E)Mumbai- 400093For further queries:Chandni Sahgal+91 9820075332sahgal.chandni@gmail.comURL: www.dessenceconsulting.com

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