Business plans are a beautiful thing. Done right, they provide you and your cofounders space to give real shape to your shared vision. They have the added (and practical!) benefits of attracting big backers, briefing potential partners, and rallying would-be advocates around the power of your business idea.
But before you embark on the process of drawing up a business plan, make sure you know what you’re in for … and what you hope to get out of the experience.
If you’re here, you’re on the road to right. But first, a word to the wise from a few experts who know best: When it comes to drafting a business plan, there are certain steps you can go ahead and skip along the way.
Check out these 6 mistakes to avoid when you draw up your very own business plan.
1.Wasting Time on a Business Plan You Don’t Need
Business plans sure seem like a lot of work for uncertain reward, don’t they?
Tandem cofounder Skyler sure thinks so. “Don't waste time in the minutia of a business plan,” he advises. “It's going to change week-to-week as you try to find product/market fit. It'll be out of date the minute you write it, so focus on finding a market and iterate and adapt until you get there.”
Lesson learned: If you don’t know what you want out of your business plan -- if you’re just doing it to do it -- save yourself the trouble, and stop before you start.
2.Starting from Scratch
The best thing about writing a business plan nowadays is the wealth of resources available to you. There’s just no excuse for starting completely from scratch.
Nicole Davis of Butler-Davis Tax and Accounting suggests SBA.gov’s Build Your Business Plan feature for anyone who doesn’t know where to start. And the internet abounds with business plan templates; some even come with expert tips embedded inside to guide you.
Lesson learned: Take help where you can get it! Do a little research and find yourself a good jumping-off point before you dive in.
3.Sharing Too Much
When it comes to your business -- especially at these early stages -- you should absolutely know all the ins and outs. But that doesn’t mean you have to cram them all into one little business plan.
Sean Dudayev of Insure Chance recounts his first experience writing a business plan: “We included too many details, which made the plan too rigid.” He goes on, “I would say keep it simple. Save the intricate details for day-to-day, week-to-week plans. It’s best to focus on the overall picture and steer clear of what seem like absolutes, because changing your strategy as you go is practically inevitable.”
Lesson learned: Keep your plan specific enough to steer you right, but high-level enough to accommodate low-level changes later on.
4.Putting Formality Above Creativity
You definitely want to keep your business plan professional, but not at the expense of all the interesting, attention-grabbing things you have to say.
As Russell Sobel, Ph.D., of The Citadel School of Business points out, “Potential investors like creativity.”
“You are an entrepreneur, and are expected to think differently and be creative,” he adds. “Using software that automatically generates your business plan may be easier, but it is no way to impress investors. They want a business plan that is creative, and unique in terms of content, organization, and presentation. Yes there are certain sections you need to include, but they don't have to look like a machine spit them out on your behalf.”
Lesson learned: Follow a format, but follow your entrepreneurial instincts as well. Write something that reflects your passion, and the rest will follow.
5.Failing to Think Ahead
If a business plan only holds up in the best of times, what good is it to you?
Space Standard founder Christopher Telles points out that while “an effective business plan can't remove all the risks in starting a new business,” there’s something to be said for the long-term thinking such a document asks of you.
He continues, “If the business plan has looked at all the different issues -- both business and economic -- that can endanger the business, [owners] may be able to manage their way around this unforeseen obstacles.”
Lesson learned: Take this opportunity to plan for all the ups and downs your business’ future holds.
6.Writing Something You Can’t Stick To
Obvious but oh-so-important! Once you’ve thought through your whole business plan and it accounts for potential ups and downs, make sure it’s realistic.
Lisa Hennessy of Your Pet Chef is among those who feel drawing up a business plan valuable in and of itself. “The time you spend creating your road map will help save you time in the future,” she explains.
But, she warns, “put a lot of thought into how you want to expand your business, plan it out and stick to it. It's very easy to become distracted by what we call shiny objects once you launch your business.”
“Sticking to your plan will help you stay focused and achieve success.”
What do you think? Leave a comment and let us know the dos and don’ts that work for you as you draw up your business plan.