There’s no doubt in my mind that starting a new business is an incredible thing. I have definitely been there and experienced it all when I started Grammar Chic four years ago. The excitement, the nerves, the feeling that you want to do it all, everything, right now, are definitely things that I went through. But at the same time, before you get ahead of yourself, there is something very important that you must do: write a business plan.
Sure, sure, you have a winning business idea. You have thought it all through and now you think that it is time to act on it.
You could be right. But you might also be overlooking something drastically important, too. A business plan can help alleviate that risk.
Of course, there’s mixed advice out there and if you Google, “How to write a business plan,” you are provided almost a billion results. There is advice on how to pen an executive summary, the points that must be covered in a marketing overview and how to come up with projections. No matter where you get your information on these items, I can tell you that there are some common mistakes that the majority of entrepreneurs make when they are starting their venture. Read on to find out if you are making any (or all) of these mistakes as you plan for the next step.
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Mistake #1: Believing that you don’t need to write a business plan
Yes, the very first mistake many entrepreneurs make is somehow believing that they are the exception and not the rule. Some individuals think that a business plan is only needed if they are actively seeking investment from a bank, venture capital firm or angel investor. This is an expensive myth.
Writing a business plan provides you the opportunity to get all of your ideas out on paper and evaluate everything thoroughly. It will give you the chance to see where there might be holes in your operational plan or potential pitfalls in a marketing strategy. It will also let you see where the upsides and benefits of your business model happen to lie. Taking the time to write a business plan will allow you to understand your idea’s weaknesses, as well as its strengths, and whether you will be able to overcome any challenges it may present.
Moreover, writing a business plan will also give you the chance to truly realize if there are hurdles that you won’t be able to handle. Knowing this before you invest in your idea will save you a bunch of headaches in the long run. The very first business venture I engaged in on my own, also in a niche industry, about a decade ago crashed and burned. First, I realized too late that I needed a business plan and by the time I got done hashing one together, what should have been obvious to me before beginning the venture was now glaring at me and sneering. Ultimately, if I would have taken the time to do the business plan, I would have discovered several significant holes in my business model based on funds, operational needs and overall market. I learned my lesson and didn’t make the same mistake when I was launching Grammar Chic.
Mistake #2: Referencing business features
It’s very common for budding entrepreneurs to think about the features and the benefits of their product or service and talk about them in their business plan. However, this is a strategy that is akin to the sales guy who walks into a prospect’s office, talks about the bells and whistles, throws a contract down for a signature and then is confused when the prospect walks away. Ultimately, if you have a great product, but don’t first establish the need or why anyone would care about your product, you are breaking the first rule of sales. If you can’t establish a need or a prospect’s “pain,” you aren’t going to sell your stuff.
In your business plan, you must answer the all important question of why people would care if your business exists at all. It is this that drives customer loyalty and inspires a person to look to your product instead of a cheaper competitor. You have to sell your mission and appeal to the fact that there is a concept missing in the marketplace. Your business plan is where you first have the opportunity to lay this out and inspire passion and interest in a reader.
Mistake #3: Believing your business plan lives in a vacuum
I get it, you don’t have a crystal ball. As handy as this would be to any business owner, the fact is that being able to identify what is going to happen in the future is impossible. However, what is possible is to determine what your company will do when faced with certain scenarios. Projecting best and worst case scenarios, both in and outside of your control, is an absolutely imperative piece of your business plan.
Of course, that’s just the beginning.
It’s also going to be necessary to look at a competitor, someone in your industry who you might just feel a bit jealous of while you also hold them up on a pedestal. Take a look at how they have been successful. How did they deal with recent economic issues? How have they grown? What did they do when they were faced with an internal or external crisis? How did they brand themselves? Hone in on what these entrepreneurs did and then create general concepts and apply them to your business. However, you need to be realistic here. It’s not going to be sunshine and roses every day. Being an entrepreneur means getting used to sleepless nights. You need to present all the good scenarios along with the bad and change your business plan accordingly. Moreover, update this document regularly. A business plan is not a one and done type of project. You should be modifying it with each significant event in your business.
Business plan writing is no joke and any entrepreneur worth their salt should take it seriously. I can tell you, I have written business plans for myself in my own life as an entrepreneur, in my former corporate life to identify yearly objectives and goals and plan accordingly, as well as for Grammar Chic clients. The individuals who succeed in their ventures are the ones who consider their business plan as one of the founding documents of their organization; they keep it close, edit it and consult with it regularly.
If you are searching for advice regarding a new or existing business plan, I invite you to reach out to the business writers at Grammar Chic.