According to a study about 80 percent businesses do not create a business plan. It further goes on to say that only one-third of them create an effective plan. This is the lesser-known devil. You have heard the saying “If you fail to plan then plan to fail”. Those who start with the intention to plan, risk failure because they fail at planning. As a result, the plans go into cold storage or are simply forgotten. Has that happened with your business plan?
If you search the web, you will find a zillion resources; a few 100s of books and as many blogs. Then, why do business plans end up being unproductive? What changes that makes the plan redundant & businesses are often consumed by firefighting urgent issues. I will not dwell on the importance of the plan, its purpose and, the need for reviewing it and updating it periodically. Here are 5 often committed mistakes that are either overlooked or are left unaddressed in a business plan.
Pitfall 1: Making the plan unactionable
This is subtle but very rampant in many plans that I reviewed. Business plans tend to become template driven and wordy without actionable items. The high level but lengthy descriptions of product/service; details of the product/service, etc. don’t help in drawing actionable items for implementors of the plan.
Pitfall 2: Investing little in target customers & the problem you are solving for them
Most plans get swayed by secondary analysis and focus more on the market potential based on the perceived size. Many products/services failed because they did not invest enough time & resources in understanding how the target users will benefit from the product/service. Many a times there is no short cut to research if you want to get it right.
Pitfall 3: Not Identifying the support your business needs
Very rarely does one find a business plan that articulates the support it requires in dealing with different aspects. It indicates the tendency of the entrepreneur to take up all tasks required. The best way to avoid this pitfall is to assess every activity/task and question if it is core to the business.
Pitfall 4: Assumptions!
Assumption is the mother of all screwups. Heard this one? Well, you are unaware of the assumptions you make, and if they go untested or unchallenged, they can wreak havoc to your business. A very common assumption is that the market, clients, and the world operate in a very standard and predictable way. We make a lot of assumptions about resources, operating conditions, etc. Make sure you surface your assumptions, test, and challenge them so that your plan has a firm basis.
Pitfall 5: Not treating your plan as a LIVING document
One of the fatal mistakes is to create a plan, shelve it and follow your nose during execution. Often, the plans are not reviewed. There is no greater crime than NOT reviewing the process, progress, and making course corrections. A business plan can be a good reference point and could give you good insights on what changes you could make to deal with the current reality.
Being aware of these pitfalls could help you make your business plan practical, relevant to the current context and keep you and your team focused on the business goals.Enter your text here...