Avoid these five business plan mistakes | Business | dentonrc.com – Denton Record Chronicle

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Updated: January 10, 2023 @ 8:50 am
Tracy Irby

Tracy Irby
December is National Business Plan Month, making this an entirely appropriate time to remind relatively new business owners about the importance of having a business plan. The Center for Women Entrepreneurs uses a business software template to support activities of our clients, grant winners and AccelerateHER training program cohort members, in addition to student coursework. Having a good business plan is integral to success.
There are many business software outfits to choose from, and some offer easy-to-follow templates to help entrepreneurs complete a business plan to visualize their whole business and create financials that will be useful if looking for funding. This will become the roadmap for their business. Often, we encounter potential business owners preparing a business plan for the first time who are not putting the right information in their plan. Here are some examples of what to avoid in creating a business plan:
Making it too long: Gone are the days of extremely long plans — it’s OK to have 15-25 pages in a plan with pictures and graphs as long as all the pertinent business information is added. This is no place for fluff or wordiness.
Misinterpreting their ideal client: “Everyone” is not a customer for your business, so it is best to determine your target market from inception. Narrowing down your potential customers by such things as age, lifestyle, income and location will not only save you money on advertising, but also it will help you determine who will spend money on your business.
Unrealistic financial projections: Starting with a customer base of zero would make it difficult to have hundreds or thousands of sales your first year in business. I frequently see projections boasting sales over $1 million in Year One. In 10 years of advising startups, I have never seen a client bring in this type of revenue. Many times, expenses are mistakenly minimized and startup loans are omitted as monthly expenses.
Misunderstanding competitors: Every business has competitors, and stating that a business doesn’t have any is commonplace. A competitor isn’t just a business similar to yours; it can be one that takes the same sales dollar. If someone is in a food business, a few of their competitors could include other restaurants, food trucks, grocery stores and even vending machines.
Insufficient research: Entrepreneurs can be in such a hurry to launch their businesses that they don’t spend time doing thorough — or even any — research. I once had a client who wanted to start a business that delivered meals to seniors. I asked her if she had ever heard of Meals on Wheels, and her reply was “no.” Research would have shown that something like this already exists. Research would also give insight into market trends, competitor information, target audience and financial projections.
A business plan shows investors, lenders and potential clients that you are prepared to grow your business wisely and realistically. That you have taken the time to research and understand what you are embarking on and how to use resources already out there is a key indicator that you have chosen a tried-and-true method for starting a business.
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TRACY IRBY is the director for the Center for Women Entrepreneurs at Texas Woman’s University. Email tirby@twu.edu.

Tracy Irby
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