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7 Flaws In Your Business Plan You Need To Fix

  • Highlights

  • Importance of having a business plan

  • Mistakes to avoid when making your business plan

  • How to make your business plan appeal to stakeholders

  • Getting the right funding to put your plan into action

While an idea is central to a successful venture, it is not enough. A solid strategy needs to transform the dream into a reality and business plan is the keystone of a venture. Often, a plan determines business loan eligibility criteria.
Below are some mistakes you should avoid if you are seeking to give your dream a smooth flight to success.

1.Unrealistic Projections And Mismanagement Of Cash Flow

The financials are one of the most important aspects of running a business. Cash is the fuel driving the engine of your business.
Hence, it's important to have a clear idea of the sources of funding and cash flows into the project. Mismanagement of cash flow may also push you into bankruptcy.
Thus, it's vital that your plan shows realistic cash projections and potential earning channels.

2. Overlooking Idea Vs Execution

In your enthusiasm to turn an exciting idea into reality, you can least afford to overlook boring but important factors. A business idea needs to survive the rigorous test of socio-political and economic acceptance to survive and thrive.
Forgetting the who, why, when and how associated with a business plan will most likely result in its failure.
For example, you may come up with a radical idea of a fuel cell. However, the environmentally damaging components and high price compared to other available options will make the plan very unlikely to take off.

3.Ignoring Competitors

Michael Porter lists 'Threat of New Entrants' as one five forces of his industry analysis model. Business is not a one-man game and every venture, old or new, is under a constant threat from rivals.
An idea may be unique. However, in the modern world, the shelf life of a unique idea is very short. Before preparing the documents required for business loans, a plan must figure out how to deal with competitors. This will help you get loans at competitive interest rates.

4.Not Knowing The Target Market

Alongside segmentation and positioning, targeting is one of the most important aspects of a marketing strategy. The plan must know the audience to which it makes the value proposition.
Every business plan must consider demographic, economic, and social factors. Wrong targeting may lead to wastage of resources, social rejection and lack of revenue.

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5.Not Prioritizing Your Priorities

A modern business is a sum of a series of operations with varying degrees of importance. A plan must know how to prioritize the crucial ones over the ones less important. This was the lacuna in Varun's plan.
Proper prioritizing gives a clear idea of where to invest the limited resources. For example, you may prioritize to handle operations where you have core competencies while outsourcing the others. This helps you save operational costs in the process.

6. Not Enough Research

Note that most modern economies are knowledge-based. If you fail to know enough about your line of business, the chances of success are slim.
Before gauging your business loan eligibility criteria, build your plan on the foundation of detailed research. It must consider studies from various sources and consider social, political, and legal consequences.
There are various tools through which you can check the soundness of your business plan to check its test of reality.

Additional Read: How to use technology to increase business efficiency

7. Lack Of Determination And Organization

A plan is nothing if it doesn't make sense to all the stakeholders on board. It is like a statement of purpose to all people investing their resources in your venture. A business plan must showcase determination and commitment on the part of the entrepreneur.
While there are teething problems, you must review your plan repeatedly to weed out flaws and inconsistencies. As an entrepreneur, you must master the art of creating a holistic and detailed business plan.

Additional Read: 6 Steps to help your business raise finance

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