Top 5 Reasons Why Your Current Business Plan Isn’t Good Enough : Under30CEO Top 5 Reasons Why Your Current Business Plan Isn’t Good Enough : Under30CEO
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Top 5 Reasons Why Your Current Business Plan Isn’t Good Enough

| January 28, 2013 | 7 Comments

Business PlanI talk to a number of aspiring entrepreneurs every day, and a number of them have the same problem:  They can’t get needed funding to start or grow their business.  “There just isn’t any money out there,” they say.  In reality, there is money out there, but the competition to get it is greater than it’s ever been.  Many of these entrepreneurs or current business owners have a business plan, but just any old plan won’t do anymore.

Here are the top 5 reasons why your current business plan probably isn’t good enough to get what you need.

It’s written for the wrong audience

Many business owners make this very simple mistake – they write the plan for the wrong audience.  Keep in mind who the reader will be.  Is it an angel investor?  A venture capital firm?  The landlord?  Each of these individuals will have different requirements and different information they want to get out of the plan.  You must remember that the investor may not understand your industry or product.  You have to explain it to them in terms that they can understand.  Get technical enough to show your knowledge, but not so technical that it is over someone’s head.  It’s a tricky line, but the experts know it.

 It hasn’t been updated or has outdated research

I get a number of business plans sent to me each week that are old and outdated.  Financial projections that start in 2011 and research from 2009 doesn’t cut it.  Don’t you think our economy and financial picture have changed a little since the end of the 2000s?  The plan should contain the latest research and findings to better indicate the real market and industry for investment purposes.

The financials aren’t realistic

Can you really make $2 million profit in the first year?  Financial projections are exactly that – projections.  But, they must be reasonable, contain all of the costs that will be absorbed by the business (plus a miscellaneous expense allowance), and they have to be in line with what similar companies are doing out there.  If you don’t know what other companies are doing, research it.  This should be in your Competition section of your business plan anyway.

The plan doesn’t clearly outline the business concept

Your business plan is your pitch to the investor and an opportunity to show someone with money available that you can do it.  It’s a chance to prove that your concept works.  There is no other aspect that is more important to the plan than to have a detailed concept description, many times in the lamest terms, so that the investor understands what you are trying to do.  Don’t be vague…explain!  If you can’t explain it on paper with as much time as needed to prepare, how are you supposed to sell it in a pressure situation to a potential investor?

The plan is too short or too long

A good rule of thumb for most business plans is to be somewhere between 20 and 40 pages.  Sure, that’s a big gap.  Every business (and business plan) is different.  Don’t bother taking a 10 page business plan to a venture capital firm.  At the same time, they don’t want to see a 95 page document either.  Keep it to the important information only with as much detail as possible on the business operation and why the company will be successful.  Knowing what to include and what to scrap is best done by experts.

Brian Gilmore is the founder and Executive Director of Optimus Business Plans LLC in Dallas, Texas.  Optimus Business Plans is an industry leader in business plan development and assists clients with the acquisition of funding.  Mr. Gilmore can be reached by phone at 972-774-4402.

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Category: Startup Advice

  • Dwayne Golden Jr

    Awesome post, just recently found this blog I will be sharing this post to my readers. I just started a blog for young entrepreneurs and this type of content is just perfect.

  • Brandy Anderson

    Great post. I especially like the note about writing for the wrong audience — business owners should think of their plan the way people think of their resumes. It’s much more likely to make an impact if the plan is tailored to the audience’s needs and objectives.

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  • Julie Robert

    Nice and informative points you have shared there. A business owner should consider all these advices while making a business plan so, he will face no problems in short or long run.

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  • Miljana

    O, no! If all those factors have to be done well, your Business plan can be wrong, or your business can be unsuccessful because you didn’t calculate the main fact. The main fact may not to be profit. It has to be WAGES. If you didn’t predicted that item, you’ll be in a real problem very soon. You can work for nothing at the beginning of the prosper of your business company, but you may not to expect or to ask your employees to work many hours for nothing. Be sure that I’m right. :)
    Have a good time.

  • Miljana

    At my country that is mistake. In Business plan you have to put how many people you decided to hire, but there is no question how much money you set aside for workers’ wages? And, of course, your business can’t pass well. Your employees will be dissatisfied. Don’t forget, the human being is the greatest wealth, the main resort in your business and business idea. Thanksful to them and their dedicated work, your company has to grow up. Aand nd they will work excellent if they are good motivated, through salary and improvements. You can start up without initial capital and expect success only if you work alone.