If you’ve taken the time to develop a business plan for your start-up business, you are on the right track. You have a roadmap that will help you with decision-making in your new enterprise. Take the time to be sure your business plan doesn’t contain any of the following shortcomings that will prevent your business from being effective. If you need help, check put my three part series on how to write a business plan for even more advice.
You haven’t researched your market. Many business owners don’t have enough information about who is buying their products and why. You need to find out who your ideal customers are, what their income is, what their buying habits are, and how they make purchasing decisions, for a start. You can do this by conducting surveys or polls online, interviewing people you consider potential customers, and searching for existing data on your demographic. Organizing the results will give you a clear picture of your customers’ perspective. This is an advantage when you develop messaging and begin to “talk” to them. All public relations and customer communications should center around customer pain points.
You haven’t researched your competitors. Know who your competitors are and stay up to date on their activities not only helps you make strategy decisions, it is a learning experience as well. You should know who has the best quality product or service at what price and who has the least, what customers are saying about the company, any financials made publicly available, and what kind of marketing or advertising they do. As you follow your competitors’ movements, you will be able to observe the rewards and consequences of their decisions on many levels, and adjust your own strategy to expand, advance, or target your market in new ways.
You haven’t planned for growth. A business plan is an action plan. It’s hard to motivate yourself, your employees, and your investors with research and projections. Be sure your plan outlines an actual plan for at least one future scenario. I say at least one because you should make plans for factors beyond your control that may derail your first plan.
You don’t know your numbers. Running a business is all numbers. Sales projections, production yields, profit estimates and more can swallow the heart of a business plan: the viability of your business model. Don’t get so focused on month-to-month numbers that you lose sight of whether your business idea, operations, and strategic decisions will allow those numbers to be actualized.
Your business plan is not up-to-date. If your plan is outdated, you will not be able to use it to run your business. Most business plans are created before launch. When your new business meets the real world, however, you often need to make adjustments that aren’t incorporated or reflected in your written plans. If you haven’t looked at your business plan in a while, ask yourself why. Is it because you’ve made so many changes to daily operations, or your numbers don’t correlate with what’s on paper at all? Take the time to sit down and go over your business plan once again and decide whether you need to make changes or make a new one that will better reflect your business’s current direction.
Do you have any other common business plans mistakes for small business owner?
For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.
Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts.
As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.
Melinda,
A big Fail for small business owners that I meet with (I’m in insurance not consulting, not that it matters) is they don’t know their Metrics… They can rattle off revenue and expenses but have any idea about what their per product profit margin is.
This often leads to time wasted in areas that don’t generate as much profit as others which leads to time and effort wasted.
Do you see that?
Thanks!
Ryan H.
I been in business 7 months, I was doing great in the beginning and now my sales have dropped. I recently created my website but I haven’t seen no change. Do you think changing store around and my website can help a bit?
Great article. I think the key here is to know the numbers! As business owners we must know our bottom line and put emphasis on the the activities that work to increase our bottom line. Don’t get so wrapped up in your product/services that you forget about the numbers. Investors only concern are numbers and what systems/people that you have in place to meet and/or exceed the projected figures.
I am currently drawing up a business plan and this article couldn’t come at a better time for me. Planning for growth and knowing the numbers!? Something I really need to focus on and i believe my business will be a success. Great article indeed.
Great article!
Having written hundreds of business plans with 30+ pages, I’ve come to the conclusion that it’s not a living document for most small business owners
Most business plans are written, not by the biz owner, but by a consultant or an accountant. The biz owner usually has a general idea of what they want their business to look like, but are lost with the details. There is no ownership.
What I know for sure is that once a business plan is written, it is shelved.
You also make a great point about “outdated plans”!
Biz owners need focus and clarity every day to reach their goals. Plans must be a living, breathing document and must be updated at least once per quarter.
@SandraBaptist
“All public relations and customer communications should center around customer pain points.”
This is exactly why a communications plan is important as part of a business plan or as an adjunct to one. A good communication plan with lay out strategies, specific tactics and metrics used to reach audiences/customers. It will also ensure all your communications work together in a strategic way — from social media and your website to face-to-face interactions.
Great article. Not just in business, but in life too it is helpful to know what not to do as you are learning what you should do.
I think you offer some great advice. I used some advice from a few great ebooks to help me write my business plan. You can find them on my website www.whatisabusinessmodel.com.
Thanks for your article.