Writing a Business Plan? 4 Common Mistakes to Avoid

You’ve got a winning business idea. You’re excited,
inspired, and poised to take the plunge
(congratulations, by the way!). Next step: write a
business plan.

Unfortunately, Googling “writing a business plan”
yields an intimidating 99,600,000 results. There’s
an abundance of tips on how to craft executive
summaries, marketing plans, and projections.
While these are all fundamental pieces of a
business plan (and you should definitely do them),
there’s a little more to it than that. A stellar
business plan spreads a little magic, leaving its
reader eager to get involved.
To help you whip up your own dash of brilliance,
let’s look at (and learn from) some of the common
mistakes budding entrepreneurs make when
penning their plans.
Common Mistake #1: Thinking You Don’t
Need to Write One

Before we get practical, let’s take a step back and
get clear on the point of writing a business plan.
Well, what is the point?
A lot of entrepreneurs think they only need to
develop a formal business plan if they’re seeking
investment. This is a costly folly. Writing a business
plan gives you a chance to thoroughly evaluate
your idea inside and out, uncover its upsides and
potential pitfalls, and, most crucially, think up ways
to avoid them before they happen. It’s your chance
to stare long and hard at your ideas’ weaknesses
and decide whether or not you can overcome them.
And sometimes, you won’t be able to. I’ve written
two business plans that uncovered insurmountable
obstacles and made me realize my idea was
completely impractical. It was a valuable pressure
test that saved me time, energy, and money in the
long run.
On the other hand, if you conclude that you can
overcome any potential pitfalls, you’ll be rewarded
with an unshakable conviction that your idea can
(and will) succeed. And believe me, you’ll need it!
As an entrepreneur, you’ll be tested in ways you
never thought possible.
Common Mistake #2: Speaking in Features
All too often, people pitch their business ideas by
rattling off a bunch of features. They tell you what
their product does and how it works, including how
it has more power, more muscle, more buttons,
more everything—than the competition.
But they seem to miss a crucial question: Why?
Why will people care? Why does it matter that this
business exists at all?
This is the juicy stuff. The answer to this question is
what drives customer loyalty; it’s what makes
people pay more for your product than cheaper,
similar offers from competitors. It’s also the
backbone of the communities that people believe in
and want to be a part of.
For example, Dollar Shave Club exists to stop big
brands from robbing us blind (in the form of
expensive razors). So, the company will ship you
cheap razors each month. Could just you as easily
buy them at the store? Of course. But it’s a concept
people buy into, and it’s delivered with an
infectious attitude that customers are eager to
adopt.
And what about Zipcar? This car rental service is on
a quest to reduce car ownership. Are the company’s
vehicles top-of-the-line Hummers with all the bells
and whistles? No—but that’s not what’s important.
The company is selling a mission, and ultimately,
its customers care a lot more about that than fancy
features.
Common Mistake #3: Writing Your Business
Plan in a Vacuum

It can be hard to project what the future of your
business will look like. Plotting out best and worst
case scenarios is a worthwhile exercise and a great
place to start, but it’s really just the beginning—the
real learning happens when you turn to other
companies who’ve done it before and borrow their
recipes for success.
So with your detective hat on, spend some time
looking at analogous businesses that—admit it—
you’re a little jealous of. How exactly did they get
there? What did they refuse to compromise on?
What did they ruthlessly go after? The trick here is
to hone in on what made these companies
successful—then apply those general concepts to
your own idea.
It’s also worth thinking beyond the scope of your
industry and seeking inspiration from worlds
outside your own. For example, when I was first
setting up my business, Never Liked It Anyway, it
was clear that the site had more in common
with He’s Just Not That in to You than it did eBay.
Following this logic, I started looking into
entertainment platforms to see what lessons I could
adopt. It was incredibly helpful and shed light on a
direction for my business that I would never have
considered otherwise.
Sometimes when you’re writing a business plan, it
can feel like you’re pulling information out of thin
air—especially when it comes to the numbers. But
learning about the successful strategies of the
masters that went before you is a great way to
ground your projections and expectations in reality.
Common Mistake #4: Only Looking to the
Near Future

When you write a business plan, you’ll need to
spend some time in the weeds of detail, but you
should also take time to stand on a tall balcony
overlooking the entire garden.
What I mean is this: Set aside the number crunching
for a while, and take time to analyze the bigger
picture. What do you want your business to be
known for 10 years down the road? What do you
want to go down in history for? Think beyond just
the immediate impact of that product—after all,
Steve Jobs won’t be remembered for inventing the
iMac, but for completely revolutionizing computing.
This kind of unbridled ambition is the lifeblood of
entrepreneurship. We don’t just want to make cool
stuff—we want to change things, and change them
for the better. And above all else, a business plan
should capture that sentiment on every page.

When you sit down to write your business plan,
include the standard elements, of course—all the
usual suspects like the situation analysis,
forecasting, and operations strategy are critical. But
be sure to leave some room for the magic. It’s the
bit that will get you investors, loyalists, buzz, and
most of all—personal conviction.

[Forbed.com]

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18 thoughts on “Writing a Business Plan? 4 Common Mistakes to Avoid

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