18 Mar Avoid These Planning Pitfalls to Keep Your Business on Track
In the midst of creating your business plan, it can be easy to get so focused on plan development, you don’t give enough thought to its future implementation. But that’s a mistake that can cost you.
Your business plan is more than a means of attracting investors or business partners. It is a blueprint for how you will operate your business. To avoid having to rewrite your entire business plan a short time down the road, learn to look for these pitfalls as you put your business plan together:
1. Forgetting a plan B. No, not a second plan, but a second set of projections and strategies. The last thing you may want to think about when creating your business plan is what to do if your company falls short of its goals. But you will be further ahead if you come up with contingencies now rather than figuring them out down the road. Determine how your financial picture could change and then thoroughly address this within your plan. Don’t be afraid that doing so will have negative connotations. Your plan will still focus on your best assumptions, based on well-researched predictions. But addressing the potential for change will show you have strategies in place to ensure your business can weather unforeseen ups and downs.
2. Expecting too many customers or projects. Do your financial predictions hinge on your business taking on every project that comes its way? Be realistic in putting your numbers together and remember to stay true to a tightly focused market niche. While it can tempting for entrepreneurs to take every bit of work that knocks at their door, plan to say “no” to some opportunities to keep energy focused on what your business does best. You will be surprised how much time and how little profit comes out of allowing yourself to be pulled into side projects. Make sure your business plan doesn’t expect otherwise, from your financial assumptions to your tightly focused marketing strategy.
3. Planning too much expansion, too soon. It’s easy to get caught up in the potential for success when putting together your business plan. When valid research leads to healthy financial assumptions, you may be tempted to write some healthy expansion goals into your business plan as well. Don’t do it. Let your business tackle one thing at a time as you get it off the ground and be sure your business plan reflects this. That may sound limiting, but a focused strategy will ensure healthy, incremental growth targeting one business sector at a time instead of scattering resources into several markets too soon. Rather than addressing growth by forecasting a move into multiple industries, characterize it as increased market share in your targeted sector.
Keep sight of the core purpose of your business plan and avoid these pitfalls as you develop each component. Not only will you do yourself a favor by making your company more attractive to potential investors, you will improve your chances for success once your plan becomes the roadmap for operating your business.