Avoid These Mistakes When You're Writing a Business Plan

You're already on the right track if you know you need to write a business plan before embarking on your small-business venture. However, writing a business plan is tricky. While a good business plan can attract investors and sharpen your focus, a bad business plan can turn off investors and stop your business before it starts. Whatever you do, don't do the following:

Rush it. A good business plan takes a long time to write because you will spend most of your time researching your product, the market and competitors. You will also be looking at your finances, setting prices for your product or service and estimating what investors might make.

Try to please everyone. You need a manageable target market. Otherwise, the rest of your business plan won't seem focused.

Act like a used car salesman. While you are essentially asking investors for money, your business plan should include enough research for the facts to speak for themselves. A hard sell without the data to back it up will make an investor wonder what you are hiding.

Forget the audience. You may need to prepare different versions of your business plan for your different audiences. If your investor knows as much about the product type and market as you do, then include technical details up front. If your investor does not, you may want to place those details in the appendix.

Ignore presentation. You may be an absolute computer whiz with a surefire product, but you will not impress investors when your business plan is riddled with typos. Hire a professional proofreader, or at least have another person read the plan.

By taking your time, gathering the facts and checking every detail, you are making your business stronger. No matter how good of an idea you have, you won't get anywhere unless you present your idea as clearly and accurately as possible.

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Writing small business plans helps you define your business strategy, provides you with a point of reference to measure your success and presents lenders or other investors with the information they need to make a loan decision.

Learning how to write a business plan takes time. This list of do's and don'ts can help you know if you are headed in the right direction.

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