Business Plan Development: Common Mistakes & Tips
Common Mistakes in Business Plan Development
- Believing that sufficient financial resources guarantee success.
- Becoming infatuated with an idea and ignoring product/service shortcomings.
- Assuming any technologically significant product/service is marketable and profitable.
- Lacking clarity in forming the right team. Ensure you and your future employees possess administrative experience and knowledge of business and marketing.
- Estimating sales solely based on equipment production capacity, neglecting other relevant factors influencing sales variations.
- Failing to analyze and understand your target market.
- Attempting to conceal weaknesses in your business.
- Assuming figures without justification and not evaluating the potential consequences.
- Adjusting financial statements to fit unrealistic projections.
- Sending the business plan to the wrong person.
- Exaggerating your assets. Avoid greed and deception.
How a Business Plan Helps Entrepreneurs
- Commit to the idea.
- Develop into an excellent administrator.
- Save money and time invested, with proper focus and control of activities.
- Convince other companies to form strategic alliances.
- Improve the ability to make sound, informed, fast, and accurate decisions.
The Origin of the Business Opportunity Plan
The starting point for identifying business ideas is to study their origin:
- Existence of unmet needs or inadequate solutions.
- Emergence of new ways to meet existing needs.
- Creation of entirely new needs.
Business Ideas and Business Opportunities
An attractive market structure where the entrepreneur possesses the capabilities and resources to effectively develop a strategy.
Distinctive capabilities and resources of the entrepreneur can be quite varied:
- Innovation: The ability to create products or develop new, more efficient production processes; a source of opportunities for market entry and, in some cases, building competitive advantages.
- Strategic Activity: The entrepreneur owns or controls a resource or special skill unavailable to other individuals or companies.
Systematizing the Search for Business Opportunities
In dynamic business areas, developing a procedure is required to help the entrepreneur:
- Anticipate and, as far as possible, plan the future continuously and systematically.
- Make the best possible use of resources.
- Maintain a close relationship with their environment.
- Make decisions about products with minimal delay.
- Exploit any unexpected opportunity that arises.
Criteria for a dynamic business area:
- How long will the product’s useful life last?
- Is the scope sufficient for the search for business opportunities?
- Can it be described concisely and easily understood?
- Is it likely to foster new developments?
- Is it unique or related to another existing product?
- Does it encompass some existing products or activities?
- Will it provide an activity to utilize current sales channels?