Creating a convincing business plan is the most important step in attracting investors. Without paying attention to the way you build your business plan, you risk not being able to launch your business because no one is interested in co-funding it. The truth is, a good business plan is a sure way to success because it clearly states what the purpose of the respective company is, what goals you want to reach and what sort of assets you possess. Before starting to create the business plan, you have to make sure that you already established your strengths, weaknesses, and purpose. After managing this step, you need to start projecting your vision outward, by communicating your ideas and beginning to believe in them. The next thing to focus on is represented by investing resources into making it happen. Increase your knowledge about the respective topic, learn from people who already went through that experience and put things into practice.
Once you are ready, you can start thinking about writing down your ideas and putting them together in a business plan. You will want to get a better grip on compelling writing because you have to convince investors of the idea’s worth by simply using words. You need to state your point of view on the matter, to make strong points and back them up by evidence and solid arguments, you have to build convincing conclusions to your ideas and to be very confident on what you are sustaining. This article is meant to emphasize the possible mistakes that people make when building a business plan. Here are ten different mistakes that you should avoid making in order to attract investors instead of making them lose interest:
Your business plan contains spelling mistakes
When you are writing down ideas in your business plan, you have to check what you are typing least twice to correct any spelling mistakes. Grammatical errors are the biggest enemy of professional-looking business plans, so avoid them at all costs. If you’re not good with spelling, have a professional check it out for you before presenting it to your investors. The final outcome should be error-free and good-looking.
It looks sloppy and unprofessional
Talking about good looks, a business plan should be carefully organized in the page. Keeping the business plan tidy is a must for making it easily readable for the investors. Don’t write huge blocks of text that people won’t look forward to reading. Always choose to distribute the text evenly to both margins by using the justified alignment option. This will give the business plan a professional aspect.
It doesn’t cover all aspects of the business
A business plan should contain a client summary, a brand summary, market validation, a competitive analysis, your business goals, the services and products you are going to offer, some details about potential pricing, a marketing plan, details related to workflow and processes and so on. Excluding one of these aspects will make your business plan look incomplete and investors won’t trust it. Try to cover every aspect you may think of. You may want to read a good business plan and follow its structure while composing yours.
The language is repetitive and vague
When the vocabulary you use is repetitive and doesn’t correctly express what you want to say, it might induce the investors into confusion, which will make them lose their interest. You have to use clear, professional words instead of familiar language and you should avoid repeating the same idea over and over again. Even though you might have to spend more time composing your ideas, it is worth the trouble, as it will attract the attention of investors easier.
The business plan is too lengthy
You don’t want to expand your ideas too much. Investors won’t have the necessary time or patience to write a business plan that’s hundred-pages long. You want to keep everything between reasonable limits. Again, you should keep a good business plan example next to you at all times and make your own one similar to that. You don’t want your business plan too short either.
You are making unrealistic assumptions
The business plan is supposed to realistically present some facts and future predictions. If you are going to make unrealistic assumptions that are clearly not achievable in the next few years, then your investors will instantly lose interest. Being a good entrepreneur is all about knowing what to expect from the market and from your future business. Keep your feet on the ground when writing about it.
No research has been done
A business plan has to contain at least a research chapter. Market research is paramount to get to know your competition and foresee the obstacles that your company may have to overcome in the future. Without research, your business plan won’t be credible enough. Invest time and resources into making a consistent research to back up your business plan and investors will appreciate the efforts. Plus, research will transform your business plan into a compelling, persuasive one.
The competition was not analyzed
As mentioned before, in order to know what to expect from your business journey, you have to analyze the competition. By skipping this step, you don’t know what you involve yourself in, meaning that you can’t tell if the business plan is effective or not. Analyzing the competition is not optional – you have to do it for ensuring the applicability of the business plan.
No second opinions were considered
When you write a business plan, you should ask for different opinions to see what other people have to say. Receiving feedback is very important, as people may notice some mistakes or poor explanations that you didn’t observe until now. Correcting these mistakes and accepting other people’s opinion is a step you shouldn’t miss.
You used unfounded/fictive arguments
Never try to fool investors with fictive arguments. Use real arguments that are backed up by research or other sorts of solid information. Investors might look into the arguments you brought and if they found out you lied, they will lose interest in an instant.