Ten Most Common Mistakes in Business Planning

Raising capital is hard enough as it is. Don’t make it even harder by committing any of these common business plan mistakes.

1. Financial Projections are Too Optimistic – Entrepreneurs always say they are “conservative” but you just aren’t

2. Business Plan is Too Long – Stay under 30 pages.

3. Executive Summary is Too Long- 2 pages or less

4. All Paragraph Format – Use bullet points, graphs, tables etc. Should not look like a novel.

5. Using a Generic Template – Investors want to see YOUR business plan. Using a template might make it look like some sort of canned business plan

6. Using a Consultant to Write the Entire Plan – Consultants can certainly help, but you need to write your own business plan. Who knows your business better than you?

7. Top Down Financial Projections – Don’t start from the top saying if we can get just 1% of the market… Start from the bottom and show exactly how you plan to capture 1% of the market.

8. No Focus on Cash Flow – As a startup cash flow is probably the most important single factor for the survival of your small business. Focus on it closely

9. Exponential Growth Projections – Most businesses do not grow exponentially like Silicon Valley darlings like Facebook, Twitter, and Foursquare. Be realistic.

10. Poor Pricing – Price your product or service based on extensive research. Too low and you are not profitable, too high and you can’t make a single sale.