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17 Key Business Plan Mistakes to Avoid in 2024

Posted december 6, 2023 by noah parsons.

If you’re like most people and you’re writing a business plan for the first time, you want to make sure you get it right. Even if you follow the instructions in one of the popular business plan templates out there, you can still make mistakes.

After having spent countless hours reading thousands of business plans and having judged hundreds of business plan competitions, I’ve assembled a list of the biggest business plan mistakes that I’ve seen.

What is the biggest mistake when preparing a business plan?

The absolute biggest business plan mistake you can make is to not plan at all.

That doesn’t mean everyone must write a detailed business plan. While you should do some planning to figure out what direction you want to take your business—your plan could be as simple as a one-page business plan, or even a pitch presentation that highlights your current strategy.

Your strategy and ideas will certainly evolve as you go, but taking a little time to figure out how your business works will pay dividends over time.

17 common business plan mistakes to avoid

Assuming you’ve at least decided that you should do some business planning, here are the top business plan mistakes to avoid:

1. Not taking the planning process seriously

Writing a business plan just to “tick the box” and have a pile of paper to hand to a loan officer at the bank is the wrong way to approach business planning.

If you don’t take the business planning process seriously, it’s going to show that you don’t really care about your business and haven’t really thought through how your business is going to be successful.

Instead, take the time and use the planning process to strengthen your understanding of how your business will be successful. It will improve your chances with lenders and investors and help you run a better business in the long run.

2. Not having a defined purpose for your business plan

Why are you writing a business plan?

Is it to raise money? Are you just trying to get your team on the same page as you so they understand your strategy? Or are you planning a new period of growth?

Knowing why you are writing a business plan will help you stay focused on what matters to help you achieve your goals, while not wasting time on areas of the plan that don’t matter for what you’re doing.

For example, if you’re writing an internal business plan, you can probably skip the sections that describe your team.

3. Not writing for the right audience

When you’re putting together your business plan, make sure to consider who your readers are. This is especially important for businesses that are in the technology and medical industries .

If your audience isn’t going to understand the specialized vocabulary that you use to describe your business and what you do, they aren’t going to be able to understand your business.

On the other hand, if your audience is going to be all industry insiders, make sure to write in the language that they understand.

4. Writing a business plan that’s too long

Don’t write a book when you’re putting together your plan. Your audience doesn’t have time to spend reading countless pages about your business. Instead, focus on getting straight to the point and make your business plan as short as possible.

Start with a one-page plan to keep things concise. You can always include additional details in an appendix or in follow-up documents if your reader needs more information.

5. Not doing enough research

You don’t need to spend endless time researching, but your business plan should demonstrate that you truly understand your industry, your target market, and your competitors. If you don’t have this core knowledge, it’s going to show that you’re not prepared to launch your business.

To keep things simple, start with this four-step process to make sure you cover your bases with an initial market analysis.

6. Not defining your target market

Don’t assume your products are for “everyone.”

Even a company like Facebook that now truly does target “everyone” started out with a focus on college students. Make sure you take some time to understand your target market and who your customers really are.

Investors will want to see that you understand who you are marketing to and that you’re building your product or service for a specific market.

7. Failing to establish a sound business model

Every business needs to eventually have a way to make money. Your business plan needs to clearly explain who your customers are, what they pay you, and have financial projections that show your path to profitability.

Without a real business model , where income covers your expenses, it will be difficult to show that you have a viable path to success.

8. Failing to showcase current traction and milestones

Great business plans are more than just a collection of ideas. They also demonstrate that you have early traction — a fancy way of saying that you have some initial success.

This could come in the form of pre-orders from a Kickstarter campaign or initial contracts that you’ve signed with your first customers. Traction can be as little as expressed interest from potential customers, but the more commitment you have, the better. The companion to traction is milestones. Milestones are simply your roadmap for the future — your next steps with details of what you’re going to do and when you’re going to do it. Make sure to include your best guess at your future timeline as part of your business plan.

9. Having unrealistic financial projections

Everyone dreams of sales that start from zero and then just skyrocket off the charts. Unfortunately, this rarely happens. So, if you have financial projections that look too good to be true, it’s worth a second look.

Investors don’t want you to be overly conservative either. You just need to have a financial forecast that’s based in reality and that you can easily explain.

Keep in mind that when first starting out, you may not have exact numbers to work with. That’s perfectly fine. You can work with general assumptions and compare against competitive benchmarks to set a baseline for your business.

The key here is to develop reasonable projections that you and any external parties can reference and see as viable.

10. Ignoring your competitors

Not knowing who your competitors are , or pretending that you have no competition, is a common mistake. It’s easy to say that you have “no competition,” but that’s just taking the easy way out. Every business has competition, even if it’s a completely different way of solving the same problem.

For example, Henry Ford’s early competition to the automobile wasn’t other cars — it was horses.

11. Missing organizational or team information

When you’re starting a business, it’s likely that you haven’t hired everyone that you’re going to need. That’s OK. The mistake people make in their business plan is not acknowledging that there are key positions yet to be filled.

A successful plan will highlight the key roles that you plan to hire for in the future and the types of people you’ll be looking for. This is especially vital when pitching to investors to showcase that you’re already thinking ahead.

12. Inconsistent information and mistakes

This almost goes without saying, but make sure to proofread your plan before you send it out. Beyond ensuring that you use proper grammar and spelling, make sure that any numbers that you mention in your plan are the same ones that you have in your financial projections.

You don’t want to write that you’re aiming for $2 million in sales, while your sales forecast shows $3 million.

13. Including incomplete financial information

You may have a great idea, but a business plan isn’t complete without a full financial forecast. Too many business plans neglect this area, probably because it seems like it’s the most challenging. But, if you use a good forecasting tool like LivePlan , the process is easy.

Make sure to include forecasts for Profit and Loss, Cash Flow, and Balance Sheet. You may also want to include additional detail related to your sales forecast.

For example, if you run a subscription business , you should include information about your churn rate and customer retention.

14. Adding too much information

Don’t fall into the trap of adding everything you know about your business, your industry, and your target market into your business plan. Your business plan should just cover the highlights so that it’s short enough that people will read it.

A simple and concise plan will engage your reader and could prompt follow-up requests for additional information.

Focus on writing an engaging executive summary and push non-critical, detailed information into your appendix — or leave it out altogether and leave the details for those that ask.

Remember, your business plan is there to serve a purpose. If you’re raising money, you want to get that next meeting with your investors. If you’re sharing your strategy with your team, you want your team to actually read what you wrote.

Keep your plan short and simple to help achieve these goals.

What should not be included in a business plan?

Here are a few things to leave out of your plan:

Full resumes of each team member. Just hit the highlights.
Detailed technical explanations or schematics of how your product works. Put these in the appendix or just leave them out completely.
A long history of your industry. A few sentences should be enough.
Detailed market research. Yes, you want market research but just include the summary of your findings, not all the data.

Make sure to include:

Executive summary.
Financial projections.
Market research (just a summary)
Competition overview
Funding needs (if you’re raising money)

15. Having no one review your plan

As with any work that you do, it’s always helpful to have a few other people take a look at your work as you go. You don’t have to please everyone and you don’t have to implement every comment, but you should listen for themes in your feedback and make adjustments as you go.

A fresh pair of eyes will always help spot pesky typos as well as highlight areas of your plan that may not make sense. You can even explore having a plan writing expert review your plan for a more in-depth analysis.

16. Never revisiting your business plan

Business plans are never 100% accurate and things never go exactly as planned. Just like when you set out on a road trip, you have a plan to reach your final destination and an idea of how you will get there.

But, things can change as you go and you may want to adjust your route.

Planning for your business is often the same as that road trip and your plans will change as you grow your business. Keeping your plan updated will help you set new goals for you and your team and, most importantly, set financial goals and budgets that will help your business thrive.

Incorporate your plan into regular review meetings to be sure you’re consistently revisiting it and integrating the time spent reviewing into your current workflow.

17. Not using your business plan to manage your business

Revisiting and revising your business plan is how you use your plan to manage your business. If you aren’t updating your goals and following a budget, you’re flying blind. Your plan is your ultimate tool to help you manage your business to success. You can use it to set sales goals and figure out when and how you should expand.

You’ll use your plan to ensure that you have healthy cash flow and enough money in the bank to handle your growth. Without managing your plan, you’re left to guess and live with a level of uncertainty about where your business is headed.

How a business planning and management tool helps you avoid mistakes

Writing a business plan can seem like a daunting task. Sure, you can do it yourself with free templates and advice like you find on this website . But, doing it on your own can just slow the process down, lead to mistakes, and keep you from actually working on building your business.

Instead, consider using a planning tool, like LivePlan, which features step-by-step guidance and financial forecasting tools that propel you through the process.

LivePlan will help you include only what you need in your plan and reduce the time you spend on formatting and presenting. You’ll also get help building solid financial models that you can trust, without having to worry about getting everything right in a spreadsheet.

Finally, it will transform your plan into a management tool that will help you easily compare your forecasts to your actual results. This makes it easy to track your progress and make adjustments as you go.

So, whether you’re writing a plan to explore a new business idea, looking to raise money from investors, seeking a loan, or just trying to run your business better—a solid business plan built with LivePlan will help get you there.

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Noah Parsons

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Common Mistakes to Avoid When Writing a Business Plan

Crafting a business plan is a delicate balancing act. It demands a deep understanding of your market, a clear value proposition, realistic financial projections, a competent team, and the flexibility to adapt to changing circumstances.

All too frequently, an entrepreneur or business owner may lean on a business plan template or outsourced freelancer, bypassing the essential strategic work that needs to go behind it. This often results in a business plan that is generic and lacks the specific details and insights that make the business unique.

Remember, a good business plan is not just a document; it's a reflection of your business idea and strategy. It's an opportunity to delve deep into your business idea, understand your market, define your value proposition, and plan for your business's future.

So, whether you're a first-time entrepreneur with a new business idea or a small business owner looking to expand, here are some common mistakes made during the business planning process.

Insufficient Market Research

Market research is the foundation of business planning. It's the key to unlocking a profound understanding of your target audience, offering invaluable insights that can steer your business decisions. Without comprehensive market research, you risk basing your strategies on assumptions about your customers' needs and preferences, a misstep that can lead to expensive errors and overlooked opportunities.

In the rapidly evolving business landscape, the freshness of your data is paramount. Markets are in a constant state of flux, and data that was accurate a year ago may not hold true today. This is particularly relevant in the wake of the recent pandemic, which has caused seismic shifts across every industry.

Therefore, it's crucial to not only use the most recent data but also understand the context behind the numbers. This involves analyzing the data in relation to your business goals, industry trends, and market dynamics. It's about asking the right questions: What do these numbers mean for your business? How do they impact your target audience? What opportunities do they present, and what challenges do they pose?

The real value of market research lies in your ability to interpret the data, identify gaps and opportunities, and apply these insights to your business strategy. It's about turning raw data into actionable intelligence that can inform your business decisions.

There's a wide array of tools at your disposal for conducting market research , from free resources to premium platforms. Government resources such as the U.S. Census Bureau can offer a wealth of insights into consumer behavior and market trends. However, for more granular and industry-specific data, you might need to turn to premium sources like IBISWorld or paid industry reports.

Artificial intelligence (AI) has emerged as a potent tool for market research. However, it's important to exercise caution when using AI for data collection. Even advanced AI tools like ChatGPT-4, with the aid of browser plugins, can sometimes provide inaccurate data. Therefore, always cross-verify the sources and accuracy of the data obtained from AI. Remember, a single oversight in your market research can undermine the credibility of your entire business plan.

Where AI truly shines is in its ability to analyze vast amounts of data swiftly and accurately, revealing patterns and trends that might be challenging to discern manually.

Beyond online research, don't underestimate the power of direct interaction with potential customers. Conducting surveys or simply engaging in conversations can offer firsthand insights into your customers' needs and preferences, often revealing valuable information that isn't readily available in online data.

Ignoring Your Target Customer

Your target audience is the lifeblood of your business. They are the people who will use your product or service, advocate for your brand, and ultimately drive your revenue. Therefore, it's crucial to understand who they are, what they need, and what they value.

Start by creating customer personas . These are detailed profiles of your ideal customers, including demographic information, interests, pain points, and buying behavior. This will help you understand your customers' needs and preferences, allowing you to tailor your business plan to meet these needs .

However, understanding your customer is only half the battle. The other half is communicating how your product or service meets their needs and adds value to their lives. This is where understanding your unique value proposition comes into play.

Your value proposition is what sets you apart from your competitors and persuades customers to choose your product or service. Highlight the unique benefits that you offer, such as superior quality, convenience, or affordability. Use clear, concise language that resonates with your target audience. Your value proposition should be the cornerstone of all your marketing efforts, from your website copy to your social media posts.

Neglecting Competitive Analysis

In the realm of business, being unaware of your competitors is a recipe for disaster. Overlooking your competitors can leave you unprepared and unable to counter their strategies effectively. As such, a comprehensive competitive analysis should be a fundamental part of your business plan.

Begin by pinpointing your primary competitors. Scrutinize their products or services, pricing strategies, marketing approaches, and customer feedback. This analysis will help you comprehend their strengths and weaknesses, and identify opportunities for differentiation.

Digital tools can be a great help in this regard. For instance, you can use AI tools like ChatGPT-4 to analyze a competitor's website and summarize its products, services, and unique value proposition. This can give you a clear idea of how your competitors position themselves in the market.

Next, delve into what customers are saying about your competitors. Online reviews on platforms like Yelp! or Google Reviews can provide invaluable insights into what customers like and dislike about your competitors' offerings. This can help you identify gaps in their products or services that you can fill.

If the competitor has a brick-and-mortar location, pay it a visit. Use your powers of observation and take note of their customer service, the arrangement of their store, their product presentations, and any other aspects that could provide insights into their operations. If your business offers a service, consider reaching out to competitors as a potential customer. This can provide valuable information about their pricing structure and sales approach.

Numerous entrepreneurs succumb to the misconception that they have no competitors because their idea is genuinely innovative. Even if your offering is revolutionary, your potential customers are currently allocating their resources elsewhere. This concept aligns with the "Jobs to Be Done" theory, which posits that customers "hire" products or services to perform specific "jobs" or fulfill certain needs. Therefore, you're competing with whatever your potential customers are currently "hiring" to do the job your product or service aims to do, whether it's a similar product, a different solution to the same problem, or even an entirely different product that accomplishes the same job. These constitute your indirect competitors, and comprehending them is just as vital as understanding your direct competitors.

By meticulously examining your direct and indirect competitors, you can start to identify areas where you can distinguish yourself. Your competitive edge lies in the unique traits or abilities that make your business outshine others in your market. This advantage could be derived from your groundbreaking technology, exclusive processes, exceptional team, or a strong brand reputation.

To convey your competitive advantage, your business plan must express how you plan to capitalize on it. This could involve showcasing your innovative technology, underscoring your team's expertise, or demonstrating your brand's solid reputation. Remember, business is a competition, and your goal is to win by convincing customers to choose you over your competitors.

Forgetting The Goal

Different stakeholders have different expectations and requirements from a business plan. For instance, a bank looking at your business plan for a loan application will have different criteria than a potential investor considering an equity investment.

A bank is primarily concerned with your ability to repay the loan. They will focus on your financial projections, cash flow, and collateral. They want to see that your business is stable and has a reliable source of income to service the debt. Therefore, when writing a business plan for a bank , you should emphasize your financial stability and risk management strategies.

On the other hand, an investor is looking for growth potential and a return on their investment. They are interested in your business model, market opportunity, competitive advantage, and exit strategy. They want to see that your business has the potential to scale and deliver a significant return. Therefore, when writing a business plan for an investor , you should highlight your growth strategy and potential return on investment.

Your internal strategic plan, however, serves a different purpose. It's a tool for setting your business goals, defining your strategies for achieving them, and identifying metrics for measuring your progress. It's more detailed and operational than a business plan for external stakeholders. It includes specific tasks, responsibilities, and timelines. Therefore, when writing an internal strategic plan, you should focus on your operational plans and key performance indicators (KPIs).

The language and tone of your business plan should also be adapted to your audience. A business plan intended for a bank or potential investors should be formally written and highly professional, while an internal strategic plan can be more straightforward, using bullet points and an iterative approach that allows for adjustments as needed.

Finally, consider how you'll present your business plan. Banks may not require a highly visual presentation and might prefer a more traditional, text-heavy document. Investors, on the other hand, value more impact, such as a pitch deck or a well-designed executive summary that can help them quickly understand your business model and growth potential.

Being Unrealistic About Your Financial Projections

When it comes to financial projections, achieving a balance between optimism and realism is key. It's crucial to demonstrate to investors that your business has the potential for success, but it's equally important to show that you have a clear understanding of the market and your financials. Overly optimistic projections can raise red flags for investors, leading them to question your financial management skills and decision-making abilities. Conversely, overly conservative projections may make your business appear less appealing and unlikely to yield substantial returns.

Thorough research, market trend analysis, and expert consultation are crucial to creating realistic and achievable financial projections that align with your business goals. By doing so, you gain confidence from lenders and investors and increase the likelihood of securing funding for your business.

To estimate your revenue, consider factors like your pricing strategy, sales volume, and market size. It's important to be conservative in your estimates and consider a sensitivity analysis with best-case and worst-case scenarios.

When forecasting your revenue, consider whether to a bottom-up or a top-down approach . A bottom-up approach starts with the unit sales (like a single product sale) and scales up, while a top-down approach starts with the total market size and estimates what portion of that market you can capture. Both approaches have their merits and can provide valuable insights when used together.

Fixed expenses, such as rent and salaries, remain constant regardless of your business activity, while variable costs, like raw materials and shipping, fluctuate depending on your business activity. By accurately estimating your revenue and expenses , you can create a realistic budget that helps you avoid financial pitfalls.

Don't stop with just the financial forecast, because that alone is only part of your financial health. Your cash flow projection should include your expected cash inflows from sales and other sources, and your expected cash outflows for expenses and investments. This will help you anticipate periods of negative cash flow and plan for contingencies.

In your financial planning, be sure to assess the company's break-even point, which is when your total revenue equals your total costs, and demonstrates the point at which your business becomes profitable.

Neglecting the Importance of Your Team

Your team members are more than just employees; they are the catalysts propelling your business's growth and development. When investors, lenders, and other stakeholders scrutinize your business plan, they are looking for a team that is not only skilled and experienced but also cohesive and committed.

Begin by introducing each key team member. Include their name, role, and a brief biography that highlights their relevant skills and experience. The qualifications of your team should extend beyond their educational background and work history. Emphasize their unique "soft skills" and other talents that make them indispensable to your business. Consider their history of success and how their past experiences can contribute to the growth of your business.

Moreover, the cohesion of your team is equally significant. Illustrate how your team members' skills complement each other and how they work collectively to achieve your business goals.

If you haven't assembled your team yet, discuss your plans for recruitment and training. Outline the qualities and skills you're looking for in potential team members, and explain how you plan to attract and retain top talent. Discuss your strategies for fostering a positive and productive work environment, and how you plan to train your team to ensure they have the skills and knowledge needed to succeed.

Thinking Your Business Plan is Done

Your business plan is a dynamic document that should mirror your evolving business reality and market conditions. It's not a one-off task, but an ongoing process that demands regular review and revision.

To ensure your business plan remains pertinent and effective, it should be reviewed and updated regularly. Establish a review schedule, such as quarterly or annually, and adhere to it. During each review, evaluate your progress towards your goals, identify any shifts in your market or industry, and adjust your strategies accordingly.

Market trends fluctuate, new technologies surface (looking at you AI), and customer preferences change. Keep your finger on the pulse of market trends and disruptions, and be prepared to seize new opportunities as they emerge. This could involve embracing new technologies, penetrating new markets, or pivoting your product or service. By being proactive and adaptable, you can convert market changes and opportunities into a competitive edge.

If your current strategy isn't working, or if new opportunities arise, your business plan should guide you in knowing how and when you need to pivot . This might involve changing your target market, adjusting your product or service, or adopting a new business model. By being flexible and responsive, you can ensure your business remains competitive and resilient in the face of change.

By steering clear of these common mistakes, you can craft a business plan that is comprehensive, compelling, and convincing to your stakeholders. A well-constructed business plan not only aids in attracting funding and customers but also serves as a roadmap for your business's success. Invest the time to do it right, and your business will reap the rewards.

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Top 10 Business Plan Mistakes When it comes to creating a business plan that attracts investors, these tips will help you get it right the first time.

Every business should have a business plan. Unfortunately, despite the fact that many of the underlying businesses are viable, the vast majority of plans are hardly worth the paper they're printed on. Most "bad" business plans share one or more of the following problems:

1. The plan is poorly written. Spelling, punctuation, grammar and style are all important when it comes to getting your business plan down on paper. Although investors don't expect to be investing in a company run by English majors, they are looking for clues about the underlying business and its leaders when they're perusing a plan. When they see one with spelling, punctuation and grammar errors, they immediately wonder what else is wrong with the business. But since there's no shortage of people looking for capital, they don't wonder for long--they just move on to the next plan.

Before you show your plan to a single investor or banker, go through every line of the plan with a fine-tooth comb. Run your spell check--which should catch spelling and punctuation errors, and have someone you know with strong "English teacher" skills review it for grammar problems.

Style is subtler, but it's equally important. Different entrepreneurs write in different styles. If your style is "confident," "crisp," "clean," "authoritative" or "formal," you'll rarely have problems. If, however, your style is "arrogant," "sloppy," "folksy," "turgid" or "smarmy," you may turn off potential investors, although it's a fact that different styles appeal to different investors. No matter what style you choose for your business plan, be sure it's consistent throughout the plan, and that it fits your intended audience and your business. For instance, I once met a conservative Midwest banker who funded an Indian-Japanese fusion restaurant partly because the plan was--like the restaurant concept--upbeat, trendy and unconventional.

2. The plan presentation is sloppy. Once your writing's perfect, the presentation has to match. Nothing peeves investors more than inconsistent margins, missing page numbers, charts without labels or with incorrect units, tables without headings, technical terminology without definitions or a missing table of contents. Have someone else proofread your plan before you show it to an investor, banker or venture capitalist. Remember that while you'll undoubtedly spend months working on your plan, most investors won't give it more than 10 minutes before they make an initial decision about it. So if they start paging through your plan and can't find the section on "Management," they may decide to move on to the next, more organized plan in the stack.

3. The plan is incomplete. Every business has customers, products and services, operations, marketing and sales, a management team, and competitors. At an absolute minimum, your plan must cover all these areas. A complete plan should also include a discussion of the industry, particularly industry trends, such as if the market is growing or shrinking. Finally, your plan should include detailed financial projections--monthly cash flow and income statements, as well as annual balance sheets--going out at least three years.

4. The plan is too vague. A business plan is not a novel, a poem or a cryptogram. If a reasonably intelligent person with a high school education can't understand your plan, then you need to rewrite it. If you're trying to keep the information vague because your business involves highly confidential material, processes or technologies, then show people your executive summary first (which should never contain any proprietary information). Then, if they're interested in learning more about the business, have them sign noncompete and nondisclosure agreements before showing them the entire plan. [Be forewarned, however: Many venture capitalists and investors will not sign these agreements since they want to minimize their legal fees and have no interest in competing with you in any case.]

5. The plan is too detailed. Do not get bogged down in technical details! This is especially common with technology-based startups. Keep the technical details to a minimum in the main plan--if you want to include them, do so elsewhere, say, in an appendix. One way to do this is to break your plan into three parts: a two- to three-page executive summary, a 10- to 20-page business plan and an appendix that includes as many pages as needed to make it clear that you know what you're doing. This way, anyone reading the plan can get the amount of detail he or she wants.

6. The plan makes unfounded or unrealistic assumptions. By their very nature, business plans are full of assumptions. The most important assumption, of course, is that your business will succeed! The best business plans highlight critical assumptions and provide some sort of rationalization for them. The worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin. Market size, acceptable pricing, customer purchasing behavior, time to commercialization--these all involve assumptions. Wherever possible, make sure you check your assumptions against benchmarks from the same industry, a similar industry or some other acceptable standard. Tie your assumptions to facts.

A simple example of this would be the real estate section of your plan. Every company eventually needs some sort of real estate, whether it's office space, industrial space or retail space. You should research the locations and costs for real estate in your area, and make a careful estimate of how much space you'll actually need before presenting your plan to any investors or lenders.

7. The plan includes inadequate research. Just as it's important to tie your assumptions to facts, it's equally important to make sure your facts are, well, facts. Learn everything you can about your business and your industry--customer purchasing habits, motivations and fears; competitor positioning, size and market share; and overall market trends. You don't want to get bogged down by the facts, but you should have some numbers, charts and statistics to back up any assumptions or projections you make. Well-prepared investors will check your numbers against industry data or third party studies--if your numbers don't jibe with their numbers, your plan probably won't get funded.

8. You claim there's no risk involved in your new venture. Any sensible investor understands there's really no such thing as a "no risk" business. There are always risks. You must understand them before presenting your plan to investors or lenders. Since a business plan is more of a marketing tool than anything else, I'd recommend minimizing the discussion of risks in your plan. If you do mention any risks, be sure to emphasize how you'll minimize or mitigate them. And be well prepared for questions about risks in later discussions with investors.

9. You claim you have no competition. It's absolutely amazing how many potential business owners include this statement in their business plans: "We have no competition."

If that's what you think, you couldn't be further from the truth. Every successful business has competitors, both direct and indirect. You should plan for stiff competition from the beginning. If you can't find any direct competitors today, try to imagine how the marketplace might look once you're successful. Identify ways you can compete, and accentuate your competitive advantages in the business plan.

10. The business plan is really no plan at all. A good business plan presents an overview of the business--now, in the short term, and in the long term. However, it doesn't just describe what the business looks like at each of those stages; it also describes how you'll get from one stage to the next. In other words, the plan provides a "roadmap" for the business, a roadmap that should be as specific as possible. It should contain definite milestones--major targets that have real meaning for your business. For instance, reasonable milestones might be "signing the 100th client" or "producing 10,000 units of product." The business plan should also outline all the major steps you need to complete to reach each milestone.

Smoothing Out the Rough Spots Once you know what mistakes not to make, there are still a few steps you need to take to make your business plan "bulletproof." Be sure you . . .

Think it through. You might have a great idea, but have you carefully mapped out all the steps you'll need to take to make the business a reality? Think about building your management team, hiring salespeople, setting up operations, getting your first customer, protecting yourself from lawsuits, outmaneuvering your competition, and so on. Think about cash flow and what measures you can take to minimize your expenses and maximize your revenue.
Do your research. Investigate everything you can about your proposed business before you start writing your business plan--and long before you start the business. You'll also need to continue your research while you write the business plan, since inevitably, things will change as you uncover critical information. And while you're researching, be sure to consult multiple sources since many times the experts will disagree.
Research your potential customers and competitors. Is your product or service something people really want or need, or is it just "cool"? Study your market. Is it growing or shrinking? Could some sort of disruptive technology or regulatory change alter the market in fundamental ways? Why do you think people will buy your product or service? If you don't have any customers or clients yet, you'll need to convince investors that you have something people really want or need, and more important, that they'll buy it at the price you expect.
Get feedback. Obtain as much feedback as you can from trusted friends, colleagues, nonprofit organizations, and potential investors or lenders. You'll quickly find that almost everyone thinks they're an expert and they all could do a better job than you. This may be annoying, but it's just part of the feedback process. You'll know when you're done when you've heard the same questions and criticisms again and again and have a good answer to almost everything anyone can throw at you.
Hire professional help. Find a professional you trust to help guide you through the entire process, fill in knowledge gaps (for instance, if you know marketing but not finance, you should hire a finance expert), provide additional, unbiased feedback, and package your plan in an attractive, professional format.

Writing a business plan is hard work--many people spend a year or more writing their plan. In the early, drafting stages, business plan software can be very helpful. But the hard part is developing a coherent picture of the business that makes sense, is appealing to others and provides a reasonable road map for the future. Your products, services, business model, customers, marketing and sales plan, internal operations, management team and financial projections must all tie together seamlessly. If they don't, you may not ever get your business off the ground.

Andrew Clarke is the CEO of Ground Floor Partners , a business consulting firm that helps early-stage, small and middle-market businesses grow through design and execution of sound business strategies.

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Common Business Plan Mistakes

Many startup business plans have the same errors. It seems new business owners have gone through a list of common business plan errors and checked them off! Here's is a list of what to avoid, so you don't make the same mistakes.

What a Lender Wants in a Business Plan

A lender wants to know only two things:

How much money do you want?
How will you pay it back?

That's it. Everything else is just fluff. You don't need a 200-page business plan to tell a potential lender this. Remember KISS - Keep it short and simple. In the thousands of business plans that have been reviewed over the years, these are the most common errors:

Not Using Third Person

Write as if you were not the business owner, but a hired writer talking about the business. Saying, for example, "XYZ Corporation will open its doors on September 1, 2010...." not "We will open our doors ...." The third person (he, she, it, they) sounds more professional and business-like and banker-friendly. If you use the first person, you tend to sound like a cheerleader and less like a reasonable person. I know it seems picky; just trust me on this one.

Not Checking Numbers

If your executive summary states you want $158,000 and your financial statements show you need $190,000, your banker will question your competence. Every number must match in every section of the business plan.

Another example, if you discuss having three employees, but your cash flow shows only salary/benefits for one, you have consistency errors. Have someone go through the plan before you send it out, just to look at all the numbers and make sure they match every time they are used.

Another problem with numbers is being vague with numbers. Don't say, "We'll make a profit soon." What does "soon" mean? In a year? Three years? Some experts say six months to make a profit is a minimum, while others state that three years is a minimum . Of course, it depends on the type of business. In advertising, don't say, "We will spend money on advertising." You should know how much you will be spending over the first year at least. Include details in your narrative as well as in your projections.

If you can't be specific, skip the sentence.

Not Making Sure Everything Is Perfect

I have caught lots of typographical errors, misspellings, sentence fragments, and other small and large mistakes in business plans. For example, one plan I viewed switched fonts several times, back and forth from Arial to Tahoma; another plan changed from the first person to the third person. In another document, photos or graphs were on the wrong pages from what the narrative said they were. Having errors in your business plan sends a message to your lender that you don't care about the details.

Being Too Optimistic

A lender wants realistic, not overly optimistic. For example, over-estimate your expenses and underestimate your income. A lender wants to see what will happen if your "worst case" scenario happens. Use meaningful charts, graphs, financial statements, or spreadsheets to show what your cash flow will look like. Include a break-even analysis , so the lender can see how and when you will start making a profit. Don't spend pages telling how wonderful your business it; talk about how it will provide a benefit to your customers and how it is different from the competition.

Confusing Cash with Profits

Your business can be profitable and you can have no cash. Without positive cash flow over a period of time, your business will not have solvency (ability to pay its bills) or long-term viability (survival). No cash means that business loan isn't going to get paid back and you close your doors. Show how your cash flow will support your loan payment.

Leaving Questions Unanswered

Don't assume your lender knows about your business. Pretend he or she is an idiot (not necessarily untrue, in many cases), at least about the business you are going into. Have someone who is not in your business read the business plan and ask you questions. Then put those questions into the plan in the appropriate place. If confused customers don't buy, confused bankers don't lend.

Not Including an Executive Summary

Business loans often go up the line in a bank, and the higher up executives want to know the "bottom line." Just tell them (1) A sentence or two about your business, (2) How much you need, in numbers or a simple chart, and (3) How you expect to pay back the loan. That's it. One to two pages is all you need for the executive summary. Put it at the beginning, so the reader doesn't have to search for it.

How to Fix these Errors

Most of these errors can be avoided by having several people read your plan. Ask each person to review a specific item above and tell them what to look for. Get a good grammarian/writer to review the plan. Remember, there is no second chance to make a good first impression.

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10 Common Business Plan Mistakes

Are you thinking about getting your business plan underway? Many elements go into a good business plan. And it often takes time, patience, and many revisions before you get it right. Set yourself up for success by learning how to avoid these ten common business plan mistakes.

1. Unrealistic Financial Projections

Lenders and investors expect to see a realistic picture of where your business is now and where you hope it goes. One of the most common business plan mistakes is overestimating the value of your company. Ensure your plan is pragmatic and explain your projections. This way, lenders and investors are much more likely to accept your plan, knowing you’re thinking logically.

2. Not Defining a Target Audience

You must define your specific target market, present how you’ve made these assumptions, and outline how you’ll target them. No business will appeal to everyone, so think carefully about who your audience is.

Need help defining your target market and learning about market research? We offer resources such as a Market Research Resources Guide , seminars on market research and one-on-one consultations with in-house experts.

3. Too Much Hype

It’s essential to believe in your business idea. But, to truly showcase its potential, you should focus on providing backup for this belief. Instead of relying on superlatives like “hottest” and “greatest,” wow them with your well-researched business plan. Let your good ideas and preparation speak for themselves.

4. Poor Research

Don’t let your hard work go to waste. Remember to double-check and substantiate all your research. Using incorrect or out-of-date information would discredit your business idea and plan. If you need clarification, get a colleague, friend, or family member to help you review it.

5. No Focus on Your Competition

Even if your business is one-of-a-kind, there’s no such thing as no competition. It’s important to highlight your competition, but not so much that the investor worries the business won’t survive. Focus on your niche and what separates you from other companies. Highlight how you plan to compete in the marketplace and paint an accurate picture of what the industry is like now and where you see it going.

6. Hiding Your Weaknesses

Every business has weaknesses, but you could risk deterring the investor if you hide or highlight them too much. The best way to address them is to include a detailed strategy for solving them. Ensure you’re being realistic and tackle these weaknesses head-on.

7. Not Knowing Your Distribution Channels

Consider how you will provide your service or distribute your product and create a secure plan. Include all possible channels and explain why they’re correct for reaching your target market. Your ability to articulate your strategy for how your product or service will reach clients is vital.

8. Including Too Much Information

Most investors have a mental checklist of 10 to 12 points they’re looking for in a business plan. The purpose of your plan is not to show the depth of your knowledge but to focus on the key elements of your business. Strive for clear and concise writing. If you have more information you want to include, create an appendix.

9. Being Inconsistent

Take time to review each section of your business plan and ensure it’s consistent. Double-check your highlighted target markets, statistics, and strategies to show investors you’re well-prepared and knowledgeable.

10. One Writer, One Reader

Remember to ask several people to review your plan before submitting it. Since you’re familiar with the information, it’s easy to miss spelling and grammatical errors. Another set of eyes will help your plan look more professional and ensure it reads correctly.

Need Help with your Business Plan?

Get started on your business plan by downloading our Business Plan Template and Cashflow Forecasting Tool.

Small Business BC’s advisors will help review your business plan and provide you with feedback with our Business Plan Review Advisory Service .

How Small Business BC Can Help Your Business

SBBC is a non-profit resource centre for BC-based small businesses. Whatever your idea of success is, we’re here to provide holistic support and resources at every step of the journey. Check out our range of business webinars , on-demand E-Learning Education , our Talk to an Expert Advisories , or browse our business articles .

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Common Business Plan Mistakes to Avoid

by I.J. Karam | Dec 7, 2020 | Business Plans

There are many common business plan mistakes you need to avoid if you wish to prepare for a successful startup launch . To help you, we propose in this article to guide you through a list of common business plan mistakes, and show you how you can recognize and dodge them swiftly and easily.

Before we get started, you might be interested to check out our industry-specific Ready-made Business Plan Templates with pre-written text and automatic financials which you can easily customize and adapt to your own project, no financial expertise required .

A business plan is an essential document summarizing a business’ strategy and how to achieve it. While this is obvious for startup ventures, it applies no less to established companies. A compelling, up-to-date business plan ensures everyone is working towards the common goals, and not in different directions.

Unfortunately, many business plans are simply not worth the paper they are printed on.

If you are currently writing your business plan or if you are simply wondering how to write a good one, make sure to avoid these common mistakes.

Common Business Plan Mistake #1: An Unexciting Executive Summary

The executive summary is a crucial part of any business plan. It is a section that effectively summarizes your larger business plan while highlighting main findings and takeaways, as well as the recommended course of action.

Investors, bankers, lenders, CEOs, managers, and senior executives are busy — always. This in turn means your executive summary is an important start; the gateway for the full plan to get the desired attention.

Consider this: In case you had a hundred and one to-do things and someone gave you a 90-page document and requested you read it, the first thing you would probably say is: “But why?”

Therefore, it is imperative that your plan should start with a compelling read. Your executive summary should be to-the-point, highlight the most important points of your document, and summarize your action plan.

However, most executive summaries are not only lackluster, but also incompletely summaries the business idea. No wonder, they fail to elicit the desired response from the business plan reader.

Don’t want that to happen to you? Spend time creating an effective executive summary. To help you do just that, we have listed 5 attributes of a great summary.

Mention the desired end-result

In not more than a couple of sentences state what will change if the need is met, the stated problem is addressed, or the desired goal is reached. You should not list the solution in detail here, but using precise KPIs, stats or numbers is highly recommended as shown in the examples below:

Wrong example:

In the first chapter, we describe how getting more inbound links will boost the website’s SERPs…

Right example:

As per our research, getting the website ranked in the top three results in Google search for this specific keyword will improve the bottom-line by 15%.

Mention the recommended solution

This is the most important part of your executive summary. Always describe the solution to the listed problem that will bring about the desired result.

As much as possible, provide a step-by-step explanation in short paragraphs, with each paragraph referring to that part of the document where you have described the mentioned solution in detail. Also, ensure each paragraph is concise and readable. Furthermore, don’t use jargons, needless abstractions, or biz blab.

Leveraging the new infrastructure will maximize existing technology investments, all the while helping us optimize re-training requirements. Improved reliability, in turn, will boost productivity, giving us a significant monetized competitive advantage.

We propose these steps to resolve the mentioned problem.

Step 1 – Install and evaluate a new system . This way we can test the latest software without jeopardizing our everyday operations. The detailed requirements for installing the new system are mentioned in Section 6.

[Step 2… and so on]

Show how you will handle risks

All business decisions involve certain amount of risk. For this reason, make sure your executive summary includes a word or two on the identified risks, and more importantly, show how you plan to handle them.

Keep this section tight, just like the rest of the summary. Avoid technical mumbo-jumbo or fluff and make sure each paragraph points to the appropriate part of the main document.

The recommended risk mitigation solution is not tied to the services or products of any specific vendor. It uses personalized scripts which can be integrated into different system architectures…

To improve customer service, the best strategy is to re-train the entire client service personnel, which will help us bring down the response time. We will also commission a personalized training manual to be used during the training sessions and placed on every desk as a reference CRM handbook.

Spell out the decision you want to be taken

You should also mention as precisely as possible the decision you want to be taken.

In case the proposed resolution involves money, make sure you list the exact amount needed. In case you want the decision to be taken within a specific time frame, mention that as well.

Our concern regarding our website’s consistently low Google rankings continues to negatively impact the company. That’s why it must be addressed without any delay.

To get our online store ranked among the top 3 search engine results and hence boost our sales, we require you to commission a $100K increase in the annual SEO budget.

Common Mistake #2: A business Plan Lacking Focus

Another common business plan mistake. Does your business plan clearly defines your target market, as well as exactly how you services or products serve the customer’s needs more effectively than the offerings of your competitors?

If no, your business plan may fail to elicit the desired response.

Many a business plan fails because of an unclear focus. More specifically, many business plans fail to clearly define the markets or customers they are targeting and, even worse, they omit to mention how their services or products are better than those of their competitors.

Lack of focus hurts startups even more. If new businesses don’t focus enough on well-defined services or products and target markets, their business plans end-up describing a business whose reasons for existence are not justified. This, as you can guess, is a recipe for failure.

Common Mistake #3: Defining Target Customers Superficially

This common business plan mistake can be deadly for your fledgling company. Often nothing hurts a business plan more than a lack of understanding who the targeted customers are. As a result, your venture may fail to get traction if you define target customers in a generalized way.

It is important to have a clear understanding of who your customers are and how the services and products offered by you add value to them. This includes a more granular understanding of your target market and how your offerings meet the varied needs of different segments of customers.

Here is an example to understand this better.

Let’s say you are coming up with a new travel app. Now saying the app is for all those who love to travel may sound impressive, because this means that your potential customer base is extremely large. However, not all travelers have the same needs, and if you fail to define each target group separately, your app may end up offering only those basic functionalities that all travelers need or being overly complex, since pleasing everyone is a herculean task. Both scenarios are not the best way to achieve success in the long run.

Go deep in your market research and analysis to understand your potential customer base. This is a key factor in your future business success.

Common Business Plan Mistake #4: Unrealistic Evaluation of Business Opportunities

Entrepreneurs must think big, but it is just as important to be meticulous and methodical in your planning. Make sure your view of things is not driven by your dreams — but rather by real data and hard facts. If you have an unrealistic picture of the market size and present the same to the investors, you are not likely to get far. A skewed view of the size of market your company targets typically stems from a superficial or generalized definition of your target customers.

For instance, in case you think that no fewer than 15% of travelers across the world will download your new app, you must have supporting data. Otherwise, your business plan will have dream figures nearly impossible for you to achieve.

Common Business Plan Mistake #5: Not Analyzing the Competition

This is probably one of the most common business plan mistakes. There is a fine distinction between being convinced that your service or product is good and having a distorted view regarding how your offerings measure up against those of your competitors. Some businesses, especially startups, make the mistake of being extremely self-centered, and eventually pay a heavy price for their folly. Another mistake that many entrepreneurs commit is underestimating or completely overlooking the chances of new players entering their market and increasing the competition even further.

If you don’t want your business plan to fall flat on its face, you must put in the effort to thoroughly understand your competition. The one question you must ask yourself is: “Do I really know who my real competitors are?”

Identifying your competitors is crucial to the success of any business, particularly a new one. Precisely for this reason, investors look for a detailed analysis here.

That being said, often identifying your main competitors is not a straightforward task. Here is an example to drive home the point:

Let’s say your company is planning to introduce a really cool salty snack chip product. Your new offering will not only have a unique texture, taste, and appearance but also health benefits.

However, the question is: Do you have it takes to compete in such a highly-saturated and competitive market?

You will not only be competing with all salty snack brands in the market but also against indirect competitors such as salty nuts, popcorns, etc. As you may agree, this looks like a tough ask for any company, especially a startup. When the competition is extremely stiff, it is likely to be extremely difficult — if not impossible — for a newbie to make a mark.

Considering this, you may benefit from targeting a more specific segment, a sub-category where you have more chances of success. For instance, the “healthy multi-grain snacks” sub-category looks more feasible. Here the competition is likely to be far less; hence the higher odds of you being successful.

To sum this point up, if you want to show your business plan readers that you have done your homework well, answer these three questions:

Who are you competing against?

Who are your direct and indirect competitors?

What are the core strengths and main weaknesses of your competitors?

What actions are your competitors planning to take next and how well are you prepared for them?

Common Business Plan Mistake #6: Using Too Much Technical Jargon

It is really natural to be excited about the technical details pertaining to your new service or product, especially if you are a new tech company.

However, the point you must remember is that investors, bankers or lenders are not technical people. So, throwing technical jargons at them right, left, and center may seriously put them off. As a new player looking for funding, that’s the last thing you would want to do, right?

Therefore, keep the technical language to the bare minimum. What your business plan readers are really interested in is the feasibility and marketability of your new offering. So, if you can show them how well your business idea meets the needs of the target customer using a clear and simple communication, you will have them hooked.

Common Business Plan Mistake #7: Underestimating or Neglecting Business Risks

Naturally, entrepreneurs want to spend their energies on finding how to best exploit available opportunities. While this is understandable, ignoring or underestimating business risks can prove fatal.

Business risks will not go away if you don’t identify and tackle them. Instead, in case a risk materializes, your company will be caught unawares. In addition to the risks linked to changing market conditions, demand trends, or increasing competition, you should also factor in regulatory and political risks. For instance, if your business is export-oriented, regulatory barriers, ever-increasing protectionism, and other global trends should be taken into account.

Common Business Plan Mistake #8: Skewed Financial Projections

When some of your assumptions are false — namely, those related to estimated demand, competitive pricing, financial risks, and market size — it is easy to make unrealistic or skewed financial projections in your business plan. However, investors are smart and experienced professionals, who can see through such gaps easily, and often at first glance.

So how can you avoid making this common business plan mistake?

Research, research, and research. While it’s true that no one can accurately predict the future, but when your projections are based on hard, real facts, you are more likely to come close to the mark.

Final Words

A business plan is a crucial document when launching a new venture, but still many entrepreneurs get it wrong. Consequences of that are almost always severe.

The good news is that you can avoid these serious mistakes. This article shows you just that. If you can stay away from these common yet dangerous pitfalls, you will do fine, and your chances of getting the desired action from your business plan readers would increase.

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11 Common Pitfalls To Be Avoided In Preparation Of Business Plan

All businesses should have a business strategy. Unfortunately, the vast majority of plans are hardly worth the paper they’re printed on, even though the business it describes continues to sputter along.

Top 11 Common Business Plan Mistakes to Avoid

1. the plan is poorly written, 2. incomplete business plan, 3. general assumptions in a business plan, 4. sticking to the plan, 5. don’t let your business plan be boring, 6. being too optimistic when measuring your market size, 7. not having the confidence to sell your service or product, 8. being inconsistent, 9. considering too many perspectives, 10. being unable to acknowledge the competition, 11. not getting professional help, bottom line.

In order to ensure you take your business off the ground, it’s crucial that you write an excellent business plan that helps convince investors to fund you.

A lot of entrepreneurs out there think that if you want to be successful with your business, you have to do everything yourself. While to some degree this is acceptable and true, writing your own business plan is a big mistake. A well-written business plan not only helps you get financed but also refine your thinking, set your marketing strategy, and recruit staff for your management team.

If your plan is riddled with errors though, your business idea, no matter how great it may be, will just sink. With that being said, here are some of the main business plan mistakes to avoid people making when choosing to personally write their business plan instead of hiring a business plan preparation service like Wise Business Plans .

Here are the Top 11 Common Business Plan Mistakes to Avoid

Spelling, punctuation, grammar, and style, SWOT analysis , and strategic planning are important when it comes to getting your business plan written. Investors are looking for clues about the underlying business and its leaders when they’re studying your plan.

When they see one with spelling, punctuation, and grammar errors, they immediately wonder what else is wrong with the business and what are the weaknesses opportunities, and threats .

Before you show your plan to a single investor or banker, go through every line of the plan with a fine-tooth comb. Run your spell check and have someone you know with strong editorial skills review it for grammar problems.

A complete plan should also include a discussion of the industry, particularly industry trends, such as if the market is growing or shrinking. Finally, your plan should include detailed financial projections– monthly cash flow and income statements , as well as annual balance sheets , going out at least three years.

The plan makes unrealistic assumptions. By their very nature, business plans are full of assumptions. The most important assumption is that your business will succeed! The best business plans highlight critical risks, common small business mistakes, and provide some sort of rationalization for them.

The worst business plans bury these risks throughout the plan so no one can tell where the assumptions end and the internal and external factors begin. Market size, acceptable pricing, customer purchasing behavior , these all involve assumptions. Wherever possible, make sure to tie your assumptions to facts.

A simple example of this would be the real estate section of your plan. You should research the locations and costs for real estate in your area, and make a careful estimate of how much space you’ll actually need before presenting your plan to any investors or lenders.

No matter how well a business plan is written , it’s certainly not going to appeal to everyone. Because of that, it’s recommended that you consider picking a single business model and sticking with it.

Don’t focus on solving multiple problems and focus on multiple industries: one is always enough and highly recommended. If you don’t take this advice seriously, then you’re going to spread yourself too thin and make a bad first impression by coming up with a sprawling business plan.

If one of your potential clients has read a few pages of your business plan and got bored, that’s a big red flag. In fact, you want them to feel exactly the opposite and make them feel pulled in by the great and well-written business ideas you have.

To make that happen, you need to write a very catchy executive summary and business plan title page . Sometimes, a well-designed logo can also go a long way.

You may think that projecting great revenue potential and vast markets to your potential investors sounds impressive, but most of the time such estimates won’t appeal to them as much as you think.

In fact, when you use big numbers too often, you appear as an amateur or someone who doesn’t really know what he’s talking about, because you don’t sound realistic.

Unless you’re completely sure you can deliver on your promises, don’t make bold statements in your business plan.

Pro Tip: Project your actual ROI by calculating your actual market size using with Business Acronym TAM TOM, SOM .

Not Having the Confidence to Sell Your Service or Product

There are no or very few ideas that face no competition and even though you may think your concept is 100% original, there are always forces that can compete with your service or product that needs to be taken into consideration. If you don’t do so, then don’t expect to find investors who are willing to financially support your idea anytime soon.

You’d be surprised how many entrepreneurs who choose to write their own business plans contradict themselves. When you do that, it immediately shows that you don’t have a good grasp of how you want\should run your business and this deters investors from seriously considering financing you.

Also, make sure that each fact concerning your main competitors, your market, and your industry is readily verifiable and also accurate. If they’re not, then investors won’t be happy about it.

While it’s important to have someone else vet your business plan, you should not exaggerate by identifying possible flaws in your thinking to the point where the reader is going to find it impossible to follow the narrative thread. Yes, sure, you do need and should address some possible investor objections, but try to be objective and clear in order to make sure you’re successful with making a persuasive pitch.

Remember that when writing a business plan , you don’t need to make it look like any other out there. All that matters is that you come up with a proposal that stands out and clearly expresses your personality and idea. By doing so, you’re certainly going to feel a lot more comfortable when you’ll need to present it in front of a group of investors .

When you present your business plan to a potential investor and he finds that it’s riddled with gaps in logic or silly errors, then that is worse than having no business plan at all.

To ensure that will never be the case, you should go ahead and reach out to some of your contacts who’ve vetted business plans before. They’ll point out any mistakes they find and ensure that you won’t make a complete fool of yourself when presenting it to potential investors

Writing a business plan is hard work, many people spend a year or more writing their plan. But the hardest part is developing a coherent picture of the business that makes sense, is appealing to others, and provides a reasonable road map for the future.

Your products, services, business model, weaknesses of a business, customers, marketing and sales plan, internal operations, management team, common small business mistakes, and financial projections must all tie together seamlessly. If they don’t, you may not ever get your business off the ground.

Many of the smartest entrepreneurs hire professional business plan writing services . Wise Business Plans can help guide you through the entire process, fill in knowledge gaps, for instance, if you know marketing but not finance, provide additional feedback, and package your plan in an attractive, professional format. Wise Business Plans can help you in Business plan mistakes to avoid when writing a business plan.

OR, Get Started on your business plan by downloading our free sample business plans in Pdf written for different organizations to put your mind at ease.

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Common pitfalls include insufficient market research, unrealistic financial projections, neglecting to address potential risks, overlooking competitor analysis, and failing to adapt the plan as circumstances change.

Thorough market research helps identify target customers, understand their needs and preferences, assess market trends and competition, and validate the viability of the business idea, ensuring a solid foundation for the business plan.

To avoid unrealistic financial projections, it is important to conduct a detailed analysis of costs, revenue streams, and market demand. Seek input from financial experts or consultants and base projections on realistic assumptions and market data.

Addressing potential risks in a business plan demonstrates preparedness and helps investors or stakeholders understand the measures in place to mitigate risks. It also helps in contingency planning and shows a realistic understanding of the challenges that may arise.

A business plan should be adaptable because market conditions, customer needs, and industry landscapes can change. Being open to revisions and updates allows the business to stay relevant and responsive to emerging opportunities or challenges.

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The Most Common Business Plan Mistakes

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Operations & Success

Susan Ward has run an IT consulting firm and designed and presented courses on how to promote small businesses.

Reading through these common business plan mistakes before you write one will make the task a lot easier – and give your new business venture a much better chance of success.

Not bothering to write one.

This is far and away the most common error. Entrepreneurs are doers so it's natural that they want to get on with things and get them done – especially when they have an idea that they’re excited about buzzing around in their heads.

But who hasn’t heard the adage "He who fails to plan plans to fail?" And that's the fate of almost every business someone starts without a business plan; failure. So yes, you need to write a business plan.

You don't necessarily need a full-scale formal version of a business plan professionally packaged in a binder (see the next point about purpose), but you do need to have one.

Not being clear about the purpose of your business plan.

A business plan is essentially a solution to a problem, the problem being how you are going to turn your vision of a successful business into a reality.

So why are you preparing a business plan? Is it to persuade a potential lender to give you a business loan? Attract investors? Figure out if your new business idea could actually be turned into a viable business? Serve as a blueprint for your successful startup?

The purpose of your business plan will affect everything from the amount of research you have to go through what the form of the finished plan will look like. If all you want to do is find out if a business idea is a good one that might be worth working up a business plan about, use these five questions to tell if your business plan idea is worth it .

Not having a clear business model.

A successful business has to make a profit. It's astonishing how many people who start small businesses don't seem to grasp this basic fact or are incredibly skilled at ignoring it.

Planning to sell something is not a business model; a business model is a plan for generating revenue over and above your expenses. You can make the best mousetrap in the world, but if it costs you $90 to make each one and people are only willing to pay $10 for one, there’s no point to doing it as a business.

By all means, if it provides you with personal satisfaction and you feel the cost is fair, do it. Otherwise, forget about it and move on to a business idea that does have profit potential. Professional and service businesses can be real dead-end traps if you don't have a clear business model set up.

Not doing enough research.

Not doing enough research to do the job is another common business plan mistake. Your business plan is only going to be as good as the research you put into it. To answer the central question of "Will this work?" you have to find the answers to a whole cluster of other questions, from "What are the current trends in this industry?" to "How will this business counter what its competitors are doing?" And the more complete the answers to the questions, the better prepared you'll be to either start your new business or shelve the idea and move on.

Every section of the business plan will need research except for the Executive Summary. Fortunately, a lot of the required research can be done online, but there’s no getting around the fact that writing a business plan is a lot of work.

Ignoring market realities.

You and what you want to do are only one half of the equation of starting a successful business. The market is the other. You can have the best product or service in the entire world for sale but it doesn't matter if no one is willing to buy it. That is one bedrock, non-negotiable market reality. So it's crucial that you market test your product or service before you try to base a business on selling it.

If you want to sell products, try selling them at local venues, such as farmers’ or flea markets and local trade shows, selling small batches online through eBay or Etsy, using focus groups to gauge interest, or giving out free samples and gathering people's feedback about them.

If you want to sell services, surveys of potential interest or focus groups can work well. Do-It-Yourself Market Research explains how you can do your own market research, including tips for designing surveys and questionnaires.

The competition is another market reality that has to be adequately dealt with in your business plan.

It's not enough to just point out who they are; you need to examine what the competition is doing and explain specifically how you’re going to counter what they're doing to win market share.

You have to make sure you take into account all the competition. Don't just think of those competitors operating exactly the same kind of businesses; think laterally, too, to be sure you identify all competitors. For instance, a prospective flower shop is not just competing against other flower shops in a particular area; it’s also competing with all the other local businesses that sell flowers, including grocery stores and big-box retailers and online flower sellers.

That doesn't mean you have to list every potential competitor in your business plan and explain how you’re going to win the contest with them, but you do have to list and explain how you’re going to deal with the potential threat of each type of competition at least.

Not doing a thorough preparation of financials.

When you look at Writing the Financial Plan Section of the Business Plan, you'll see that you need to put together three financial statements:

the income statement
the cash flow projection
the balance sheet

To do this, you need to figure out how much money you need to start and operate your business and make educated guesses about how much money your new business will bring during its first year of operation.

There are two common mistakes people make when they're tackling this section of the business plan.

The first is not being realistic about their expenses. People often leave out expenses entirely or underestimate the cost of particular expenses. Meticulous research will prevent this mistake.

The second is being overly optimistic about your new business's prospects. You're hoping your new business will do well. You wouldn't choose to start it otherwise, but you mustn't let your optimism lead you to create overly rosy cash flow projections.

Setting your business plan aside after you've written it.

If you write a business plan, use it to get a loan and never look at it again, you're wasting most of its value. A business plan is just that; a plan for how your new business is going to succeed.

Treat it as your new business's first planning document and as you move through the startup period and beyond, edit and add to it as necessary. A pair of good first additions to your business plan is the Vision Statement and the Mission Statement; creating these will solidify your goals and make sure you don't get sidetracked.

Your original business plan will also be a useful reference document when you’re doing the ongoing business planning running a successful business requires. For instance, see Quick-Start Planning for Small Businesses for instructions on how to create an action plan for your small business.

Remember Not Every Business Plan is Worth Finishing

When you're writing a business plan, the answer to the central question, "Will this work?" is not always positive.

And that's fine. It means the business plan is doing its job of showing you whether or not a business idea is worth doing and saving you potentially huge amounts of money and time.

Usually, this discovery occurs during the course of working through a business plan, not at the end. And that's the time to quit developing that particular plan.

If you discover, for instance, that the market for your proposed product is saturated while you're working on the Competitive Analysis section of the business plan, there's no point in carrying on and going to the trouble of preparing financials – your time is much better spent coming up with another business idea that may be more workable.

Perseverance and determination are great traits for entrepreneurs to possess – until they turn into foolish persistence and keep you from accomplishing what you could be accomplishing. That can be the worst business plan mistake of all.

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Quick-Start Business Plan: Is Your Business Idea Viable?
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9 Critical Steps to Writing a Business Plan
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Retail Business Plan Executive Summary
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How to Write a Unique Selling Proposition – USP

10 Common Business Plan Mistakes and How to Avoid Them

There is plenty of information available via books and seminars on how to write a good business plan. And yet, many companies, especially start-ups, make serious mistakes in business plan writing that could have been avoided with more knowledge and effort.

As a business plan contest reviewer, I see a number of typical mistakes coming up again and again. Here are 10 of the most common business plan mistakes I have come across:

1. Boring Executive Summary

Investors, bankers, and other business plan readers usually start looking at the executive summary. It should highlight the most important points of the business plan in a pithy way. The business plan should provide a convincing story on how a a highly competent team will provide products or services to precisely defined target markets based on a consistent strategy. Moreover, it should share the company’s vision on how their products or services will make the world of their customers better in a profitable way.

In reality, many executive summaries are lackluster and incomplete summaries of a business idea whose implementation remains unclear. Sometimes, it is just cut and paste of some sections from the introduction and some other parts.

Losing the busy reader already in this part could mean that investors never care to go through the whole document. They may be missing some hidden gems. However, it is the job of the business plan writer to present these gems convincingly in the executive summary.

2. Lack of Focus

Many business plans are lacking a clear focus in defining their target markets and how the envisage products and services are competitive in serving the market needs better than others. Especially for innovative start-ups there is a risk of not focusing enough on a clearly define product/service segment and target market.

The result are often business plans describing a ‘me too’ business whose reason for existence does not become clear, not to speak of electrifying potential investors or customers.

3. Superficial Definition of Target Customers

Understanding who your target customers are and how your product adds value for them is crucial. That includes a granular segmentation of target customers and how the company’s products and services will satisfy the different needs of these different customer groups.

Many business plans, however, keep the definition of target customers very general. For example, saying that your travel app is aimed for everyone who is traveling may sound great first, because this is a very large number of people. However, different groups of travelers have different needs. Without clearly defining these needs in a differentiated way, the result will either be an app with the lowest common denominator of functionality needed by most, or it may be at risk of becoming overly complex, as it tries to please everyone.

4. Overly Optimistic Evaluation of Market Size and Opportunities

Entrepreneurs need to be optimistic to start a business in the first place. However, there is fine line between being upbeat about your business prospects and presenting a distorted view of the market size which is more driven by dreams than data. It can be related to a superficial definition of the target customers. If you think, for example, that 20% of all travelers worldwide will use your app, you would need to have a lot of supporting evidence to credibly convey how you will achieve that. It is not bad for an entrepreneur to think big. However, if you, for example, overestimate the readiness of people to buy your product, you may end up with dream figures you cannot achieve.

5. Underestimating the Competition

Many start-ups are too much self-centered. Being convinced of your product or service is certainly a good attitude. However, there is risk that this could distort your view of how it matches up against products and services of competitors who have been in the market for some time. In addition, some entrepreneurs also overlook or underestimate the possibility of new entrants who could increase competitive pressure.

6. Underestimating Business Risks

Understandably, entrepreneurs focus on exploiting opportunities. Some, however, underestimate or even neglect serious business risks that could endanger the existence of the company. Ignoring the risks will not make them disappear. Instead, it will leave the company unprepared, if a risk materializes. Apart from risk caused by changing demand trends, increasing competition, or unexpected increase of production there are also political and regulatory risks to be considered. If you have, for example, an export-oriented business, you need to take into account global trends like increasing protectionism and regulatory barriers in your target markets.

7. Too Detailed Description of the Product or Service

Especially innovative technology start-ups, often led by engineers, are really excited about the technical details of their product or service. It is part of a credible story to provide enough details so the reader understands that the product or service is well designed. However, if it drifts into jargon and technical details not relevant for understanding the business impact or innovative edge of a product, then details can become a distraction or even barrier, putting off the reader.

8. Unrealistic Financial Projections

This mistake is related to false assumptions on, for example, market size, competitive pressure, and financial risks. Nobody knows the future, and projections can, thus, not be exact. However, they can be based on real data related to general market trends and past revenue and cost development.

9. Unconvincing Presentation of the Executive Team

Quite often, there are just a couple of portrait photos and CVs pasted into the business plan without explaining to the reader, why exactly this team is complementary in their competencies specifically for running the particular business presented in the plan. Investors can get very critical, if they see that important competencies in an executive team are lacking. For example, if a group of engineers without business experience is launching a start-up, there will be questions on how competence gaps in areas like financial management and marketing will be covered.

10. Lack of Review

A team working enthusiastically on a business plan is at risk of false, overly optimistic assumptions and other mistakes that can easily be overlooked, if you are immersed in the process. Thus, not having a review of the business plan by an experienced consultant or a friendly business partner who has been there can lead to mistakes with detrimental effects. A review can help find flaws in the overall business rationale, market and customer definition, or the financial projections. Even if you are not looking for external funding, not having your business plan reviewed is a serious omission.

How to Avoid Business Plan Mistakes

The simple answer would be to be aware of these mistakes and make sure not to do them. However, it is not that easy. Even if you are aware of potential mistakes, it does not automatically mean you are capable of avoiding them. It is like with people who have bad eating habits. They know all about healthy eating and are fully aware of their mistakes. And yet the still continue making these mistakes.

This is where coaching comes in. You can either try self-coaching in the executive team, which requires a high level of awareness, openness and self-distance. Or you can hire an external coach to help you discover your blind spots, become aware of unproductive habits and attitudes like, e.g., over-optimism, and change them.

I would be interested to receive comments from entrepreneurs on what mistakes they have made in business plan writing and how they fixed them.

7 Common Business Management Mistakes and How to Avoid them

Ray Slater Berry

8 min. read

Updated November 7, 2023

Every successful business comes from a great idea . This idea can be purpose-driven, vision-driven, or both. Bringing it to life in the earliest years of your business can be overwhelming . We’re not all natural-born leaders, mathematicians, business analysts, and at the same time, we’re not expected to be.

But that lack of expertise in every single business management category means mistakes are bound to happen. And if you’re not prepared to deal with those mistakes, it can quickly derail your business idea. So, if you’ve got a great business idea and are determined to bring it to life, then this article is here to help you avoid the 7 most common business management mistakes.

1. Failing to track everything

From day one of building your business, you’re going to be experimenting, creating data and processes , and learning. It’s so crucial that you keep track of everything . Even those things that you don’t deem as vital for your business to flourish.

It’s hard to predict how quickly your business will grow . Even if you have a business growth plan, it doesn’t mean that your growth will stick to it. Perhaps you’ll boom, win funding, and need to recruit hundreds of people at a time; maybe you won’t. What’s certain is, new staff will come, and old staff will go, and if you’ve not documented the past, you’ll struggle to onboard and manage knowledge for future employees.

Process documentation is essential for enabling your business to scale. It will save your hiring managers time, and it will allow future talent to learn from past mistakes. Document everything; even if you don’t see it as necessary, there’s no doubt someone can learn from it in the future. Your documentation will help measure success and set benchmarks for future KPIs .

2. Breaking data compliance regulations

One thing that you need to have down from day one of managing a business is your data compliance. Yes, we know it’s not the most thrilling of things. However, if you’re not handling consumer data correctly or legally, you could risk coming under fire and facing huge repercussions.

Take the California consumer privacy act , for example. It’s a relatively new privacy law to protect consumers’ personal information. It affects any business operating in California, or even with customers from California — which could be yours, depending on where you’re marketing.

The act protects every piece of consumer data a business may keep, helping them to sell better. Unintentional non-compliance to this particular act can result in a fine of $2,500 per violation and up to $7,500 per violation deemed intentional. Either way, these fines are something any new business can do without–especially in its earliest years.

It’s not only financial damage you can do here. A privacy scandal can also tarnish your reputation and stunt your business growth and sentiment.

3. Conducting insufficient research

Research is key — it always will be. Whether you’re doing it with your business data or you’re using public resources. It’s so important before you make a business management decision or change.

Leaders and ideas people tend to act on feelings. We tend to be very emotionally driven and impulsive. That’s not necessarily a bad thing. However, when handling a business and potentially great deals of money, we need to be more data-minded and back our decisions up with research.

Use research across every area of your business. Whether you’re researching customer satisfaction, like UX research , or a competitor analysis, or are looking at more internal subjects like internal processes best practices or company structure research, you can take safer steps by doing your research first. You’ll minimize room for error and justify decisions based on data.

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4. Not focussing on branding

No matter your business niche , product, or service. Know that you’re not just building a company. You’re building a brand. 81% of customers say they need to be able to trust a brand to buy from them.

Every public action you take builds your reputation and your online brand affinity; this also means it can jeopardize it. Ensure that you focus on building a brand and business that people can relate to , understand, and look forward to engaging with.

Branding does not stop at building a customer base, though. It can also help you attract and retain top talent. 50% of candidates won’t work for a company with a bad reputation — even if it meant missing out on a bigger paycheck.

Employer branding can drastically help your business to win the talent you need in this massively competitive market. With the 2020’s jump into remote work, it means talent can pick from more employers than ever before and are no longer limited to the businesses in their immediate travel radius.

This remote work reality means employees are making decisions to work for employers they like rather than those who only pay well. LinkedIn research shows 75% of candidates will research a company’s reputation before applying for a role — time to build a brand that gives them great results.

5. Failing to be remote ready

Building on point number four, every business needs to be ready and able to function remotely . Those businesses that only ever operated in static offices really struggled in 2020 and many didn’t live through the transition.

How can you avoid making the same mistakes? Invest in communication tools and strategies to ensure all of your business communication is online, and your employees are used to speaking using these digital channels.

However, it’s much more than tools to ensure your business is set up for success in the remote work world. Try to look at ways you can build a company culture remotely and take a look at this home-based business checklist to ensure you don’t miss anything else.

6. Forgetting finances

Numbers, to some, are an entirely different language. They can be daunting, and managing finances is certainly not something that comes easy to everyone. New businesses need to take care of everything they spend. The good news is that there are plenty of financial resources and specialists out there to help you get a hold of things from day one.

Don’t make the same mistake many new businesses do and put finances on the back burner because of a passionate idea. Driving a business with a mission is excellent. Still, you need to be able to support your mission along the way. Whether that comes through investment, personal finances, or another means, make sure you’ve got your financials looked after.

Ensure the taxman doesn’t come knocking, and your business is set up for financial success as well as prepared for crisis .

7. Disregarding the importance of customer service

Lastly, but certainly not least is customer service. 84% of consumers say customer service is a crucial factor helping them to decide whether to buy from a company or not.

The age-old saying of “ the customer is always right ” should be leading your customer service strategy, no matter your business niche. Even today, with all the forms of paid advertising available, the strongest form and highest conversion marketing tactic is still word-of-mouth — 86% of customers trust word-of-mouth reviews and recommendations.

So, how do you win peer-to-peer referrals organically and authentically? You focus on honest and rapid customer service . Even if your product is flawed or faulty, or your business makes mistakes, with humble customer service comes forgiveness.

You’ll be able to turn mistakes into opportunities, build loyal brand ambassadors, and win the hearts of your customers as well as their heads by simply handling situations with transparency. People forgive when we own up to our mistakes.

At the same time, excellent customer service can help to build higher customer success rates and, in turn, win product referrals from your customer’s micro-communities. You could be a handshake away from your biggest client, but you’ll never know if you don’t treat your current ones well.

Focus on customer service from day one and every day after you’ll be thankful for it.

Wrapping it all up

These seven business mistakes may seem daunting, but there’s a lot you can do to avoid them. Undoubtedly, you’ll make mistakes on your road to success—we’re only human and are bound to encounter problems that we don’t overcome on our first attempt. What’s important is that we learn from our mistakes, and we document them for others to learn from in the future.

Remember, whenever you are in times of doubt or come across business management problems that you’re struggling to conquer, come back to why you started your business in the first place.

You started because you saw a problem or injustice in the world that you can overcome. Or you began with a vision of creating a better world with your product or service. Remind yourself of your business purpose , mission, and vision. Stay true to it. Keep striving towards it. Whether you make one mistake along the way or many, what’s important is you keep moving forward.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Ray Slater Berry is a content strategist at Outreach Humans. He has been working in social media and content marketing for nine years. He specializes in the tech, innovation, and travel sectors. He is also a published fiction author with his first title, Golden Boy.

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Table of Contents

1. Failing to track everything
2. Breaking data compliance regulations

8 Min. Read

How to Plan a Business Expansion Using Your Business Plan

7 Min. Read

How to Turn First Time Customers Into Repeat Customers

4 Min. Read

How to Get a Partnership Deal for Your Business

How to Successfully Expand Your Business Outside of Your Core Industry

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10 Major Mistakes People Make Starting a Small Business

Posted: March 20, 2024 | Last updated: March 20, 2024

<p>The path to bringing your small business dreams into reality requires proper planning every step of the way. If it were easy to start a business without a strategy, everyone would do it. Far too many ambitious entrepreneurs quickly become their own worst enemies when attempting to start a new venture. We’ll look at the biggest mistakes that small business owners often make and how to avoid them.</p>

Slow And Steady Wins The Race

The path to bringing your small business dreams into reality requires proper planning every step of the way. If it were easy to start a business without a strategy, everyone would do it. Far too many ambitious entrepreneurs quickly become their own worst enemies when attempting to start a new venture. We’ll look at the biggest mistakes that small business owners often make and how to avoid them.

<p>Relying on a verbal or even a handshake agreement instead of a written one heightens the risk of legal problems spreading like wildfire once your business is up and running. <a href="https://www.katzlawgroup.com/why-doing-business-on-a-handshake-is-a-very-bad-idea">Katz Law Group points out</a> that should a business based on a verbal agreement find itself in a legal predicament, the only place to go is the local courthouse for a potentially costly trial. That also goes without saying that under the “bind” of a handshake agreement, parties can make far-fetched claims thanks to the lack of a paper trail. </p>

1. Failing To Have Written Contracts

Relying on a verbal or even a handshake agreement instead of a written one heightens the risk of legal problems spreading like wildfire once your business is up and running. Katz Law Group points out that should a business based on a verbal agreement find itself in a legal predicament, the only place to go is the local courthouse for a potentially costly trial. That also goes without saying that under the “bind” of a handshake agreement, parties can make far-fetched claims thanks to the lack of a paper trail.

<p>Measurable business goals can serve as navigational beacons for running a successful small business. You’ll want to establish clear short-term and long-term goals for your business. Without them, your business risks losing focus, stagnating, struggling to find meaningful accomplishments, and ultimately failing. <a href="https://smallbusiness.chron.com/importance-setting-goals-business-834.html">According to Chron.com</a>, one proven goal-setting technique is S.M.A.R.T: Specific, Measurable, Achievable, Relevant, and Time-based.</p><p>The <a href="https://collato.com/blog/organizational-goal-setting-statistics">software company Collato determined</a> that employees who operate with clear goals are up to 3.6 times more likely to be genuinely committed to their organization, and 6.5 times more likely to recommend the organization as a great place to work. Having clearly set (and documented) goals can serve as the engine that drives a successful small business.</p><p><b>Related:</b> <a href="https://blog.cheapism.com/easy-small-business-ideas-3821/">20 Small Businesses You Can Start With Less Than $1,000</a></p>

2. Not Setting Measurable Goals

Measurable business goals can serve as navigational beacons for running a successful small business. You’ll want to establish clear short-term and long-term goals for your business. Without them, your business risks losing focus, stagnating, struggling to find meaningful accomplishments, and ultimately failing. According to Chron.com , one proven goal-setting technique is S.M.A.R.T: Specific, Measurable, Achievable, Relevant, and Time-based.

The software company Collato determined that employees who operate with clear goals are up to 3.6 times more likely to be genuinely committed to their organization, and 6.5 times more likely to recommend the organization as a great place to work. Having clearly set (and documented) goals can serve as the engine that drives a successful small business.

Related: 20 Small Businesses You Can Start With Less Than $1,000

3. Lack Of Marketing And Advertising

GoDaddy determined that a mere 25 percent of small businesses had a website, which is a huge part of marketing efforts. Then, to direct your business marketing efforts, you can experiment with Facebook, email marketing, and paid search. Campaign Monitor found that 70 percent of small businesses use Facebook for marketing, 64 percent use email marketing, and then 43 percent use paid search.

Lastly, you want to make sure that you’re keeping your marketing and advertising efforts within federal regulations. You wouldn’t want to violate the Federal Trade Commission's CAN-SPAM Act just because you mistakenly sent a newsletter to someone who had explicitly unsubscribed from your mailing list.

<p>Unfortunately, cyberattacks aren’t slowing down. Over the course of 2021 there were 1,037 cyber incidents taken against small businesses, <a href="https://www.verizon.com/business/resources/reports/dbir/2021/smb-data-breaches-deep-dive/?mkt_tok=MTU3LUlQVy04NDYAAAGQsj5i9Ygi9tkAHp04MzG-zagolI0xHD619e2qGYVQRKgg09Em6Wkqg9dN-_EMgXQGzUNkYAVtaQe0VsVVgWepXHkglfuMyOUSiqqwVuT_-LSkoKh5">according to Verizon</a>. As many as 93 percent of those cyber-attacks were financially motivated. The last thing you’d want to suffer through as a small business is to have your time and resources drained by a cyber-attack that could’ve been avoidedby investing in better cybersecurity.</p><p><b>Related:</b> <a href="https://blog.cheapism.com/identity-theft-examples/">Identity Theft Horror Stories</a> </p>

4. Insufficient Cybersecurity

Unfortunately, cyberattacks aren’t slowing down. Over the course of 2021 there were 1,037 cyber incidents taken against small businesses, according to Verizon . As many as 93 percent of those cyber-attacks were financially motivated. The last thing you’d want to suffer through as a small business is to have your time and resources drained by a cyber-attack that could’ve been avoidedby investing in better cybersecurity.

Related: Identity Theft Horror Stories

<p>It could be something as detrimental as a negative review by a customer who has a problem with the whole world. Or it could be a series of glowing reviews that are only working to help your business finally hit its stride. The point is that the online reviews section for your business is important and something that shouldn't be ignored.</p><p><a href="https://www.nerdwallet.com/article/small-business/marketing-statistics-for-small-business">NerdWallet reports</a> that as much as 45 percent of bricks-and-mortar customers will read the reviews section before they actually make a purchase. You don’t want to miss out on any potential new business just because you have people that are staining the reputation of your business with dishonest nonsense. </p><p><b>Related:</b> <a href="https://blog.cheapism.com/customer-reviews/">27 of the Most Hilarious Product Reviews Online</a></p>

5. Failing To Monitor Your Online Reviews

It could be something as detrimental as a negative review by a customer who has a problem with the whole world. Or it could be a series of glowing reviews that are only working to help your business finally hit its stride. The point is that the online reviews section for your business is important and something that shouldn't be ignored.

NerdWallet reports that as much as 45 percent of bricks-and-mortar customers will read the reviews section before they actually make a purchase. You don’t want to miss out on any potential new business just because you have people that are staining the reputation of your business with dishonest nonsense.

Related: 27 of the Most Hilarious Product Reviews Online

<p>You want to make sure that you’re not falling prey to taking a scattershot approach when it comes to targeting your new customers through marketing and advertising efforts. You could implement something as simple as a checkout survey to further gauge the demographics and interests of your customers. From there, you’ll have that much easier time putting together something like a paid search campaign to target online users that could be easily convertible customers.</p>

6. Never Defining Your Target Customers

You want to make sure that you’re not falling prey to taking a scattershot approach when it comes to targeting your new customers through marketing and advertising efforts. You could implement something as simple as a checkout survey to further gauge the demographics and interests of your customers. From there, you’ll have that much easier time putting together something like a paid search campaign to target online users that could be easily convertible customers.

7. Lack Of Proper Financing

As a small business owner you don’t want to find yourself blindsided by the mounting costs of employees or inventory, and suddenly realize you don’t have sufficient financing. Take the time to ensure you have proper financing for your business.

Fundera points out that 48 percent of small businesses successfully meet their financing needs, 20 percent get loans, and then 28 percent end up without enough money if they didn’t receive a loan. This implies that as much as 52 percent of all small businesses end up getting no financing, or they’ll get a portion of what they actually needed.

For more small business tips, sign up for our free newsletters .

<p>It's all well and good to make every attempt to exemplify a passionate business owner who lives and breathes for their business. However, there is something to be said about the additional strength and breakthroughs that come from remaining open to outside help. <a href="https://www.bdc.ca/en/articles-tools/business-strategy-planning/manage-business/can-advisory-board-help-grow">A report by the Business Development Bank fo Canada found</a> that 86 percet of business firms that had advisory boards ended up seeing their sales increase by as much as 24 percent. Business productivity also reportedly increased by up to 18 percent.</p>

8. Not Seeking Help From Advisors

It's all well and good to make every attempt to exemplify a passionate business owner who lives and breathes for their business. However, there is something to be said about the additional strength and breakthroughs that come from remaining open to outside help. A report by the Business Development Bank fo Canada found that 86 percet of business firms that had advisory boards ended up seeing their sales increase by as much as 24 percent. Business productivity also reportedly increased by up to 18 percent.

<p>Regardless of the market that you find yourself in as a small business owner, you're going to have competitors. Innovation is carried on the wings of constant competition, and there may come a time when your business has to reconfigure its approach to remain relevant. </p><a href="https://sifted.eu/articles/stationf-startup-survey">A study conducted by a team at the startup incubator Station F</a> determined that pivoting is essential for a company to continue onward successfully. Their data showed that 24.7 percent of the companies that were polled had altered their markets at one point or another. Even more fascinating, is that 16 percent of the companies polled were able to firmly establish themselves through making new deals. It’s never too late to approach success as a business through a new lens.

9. Refusing To Reframe Your Approach

Regardless of the market that you find yourself in as a small business owner, you're going to have competitors. Innovation is carried on the wings of constant competition, and there may come a time when your business has to reconfigure its approach to remain relevant.

<p>According to Clark, debt collectors are not allowed to tell other people about your debt, especially your family, friends, neighbors, and employer.</p>

10. Hiring Too Many New Employees Too Soon

As a small business owner who is just starting out you don’t want to sacrifice precious time, energy, and money into onboarding new employees that never intended to have more than one foot in the door. According to SCORE’s employee engagement report 60.7 percent of small business owners classified hiring the proper talent as being the biggest challenge. From there, 45.8 percent of small business owners reported great difficulties in successfully retaining their staff. So, take your time and don’t rush through a comprehensive interviewing process with any new employees.

Related: Is Bare Minimum Monday the New Quiet Quitting?

This article was originally published on Cheapism

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The most common ruse involved consumers receiving incorrect goods or nothing at all, while others were delivered an empty package or fake goods.

57% of those surveyed said they had experienced a scam on Depop.

This compares with 53% for Shpock and 51% for Preloved and Nextdoor.

Amazon Marketplace came in at 35%, while for Gumtree and eBay the figures were both 29%.

The number for Facebook and Vinted was 24% and 22%, respectively.

Rocio Concha, Which? director of policy and advocacy, said the survey’s findings were "worrying".

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You may remember our coverage here a few weeks back on the proliferation of scams targeting Taylor Swift fans hoping to buy tickets to see one of her current run of shows across Europe...

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Resale prices from legitimate websites have been in the region of £700 each - with some fans reported to have spent well in excess of that to see their hero.

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"Most people have no idea of the problems of being an admin on these groups, as you simply cannot win."

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"But there is no law to say we can only move once the Federal Reserve (central bank of the US) moves."

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Woke no more

Companies were starting to support political causes. Now they're too scared to speak up.

Unilever spent years crafting its image as a corporate goody-two-shoes. The owner of Dove, Vaseline, Hellmann's, and a bunch of other brands axed quarterly reporting and earnings guidance in the name of focusing on sustainable long-term growth. Under Paul Polman , its CEO from 2009 to 2019, it said it would take into consideration all its stakeholders, not just shareholders, and set out to halve its environmental footprint — including greenhouse-gas emissions, waste, and water use — while doubling its sales over a decade. Five years and two chief executives later, Unilever is changing its tune . It's not doing a U-turn on environmental, social, and governance efforts, but it says it's being more realistic about what it can achieve and when. And, oh, those shareholders Unilever wasn't so beholden to? It's paying them a little more mind now, too.

Unilever isn't alone in this. Plenty of companies are reining in their rhetoric and in some cases action on issues such as sustainability and diversity. They're being extra cautious about weighing in on the social and political debates of the day, especially in an election year. In some cases they're telling their workers to cool it, too; Google, for example, fired more than two dozen workers for protesting its contract with Israel's government .

"Many executives have made the decision that it's sometimes safer to just be silent versus to take a stance, because they have a fiduciary responsibility to their shareholders and their bottom line and are very concerned about how this will be perceived," said Naomi Wheeless, a board director for Eventbrite who was formerly a global head of customer success at Square.

Call it the great un-wokening.

Over the past decade, many corporations have at least professed to take a more active role in social issues, under pressure from their customers and, more importantly, employees. Companies pushed back on North Carolina's "bathroom bill" in 2016, and when Donald Trump took the White House, many spoke out against his policies on immigration and the environment. Around that time, the Business Roundtable said it was time to rethink the purpose of a company , and BlackRock's Larry Fink expressed all sorts of thoughts about the importance of companies being responsible social stewards.

In the wake of George Floyd's murder in 2020, corporate America put out endless statements about the horror of what had happened and pledged to undertake diversity, equity, and inclusion initiatives. An expectation arose that big businesses would take a stand on issues — if Congress wouldn't do something on guns, at least Dick's Sporting Goods would .

"You can almost say that ESG ran unopposed for a few years," said Andrew Jones, a senior researcher at the Conference Board's ESG Center.

It's a bona fide countermovement against both ESG and DEI.

Then came the backlash. Over the past couple of years there's been an uproar, especially among conservatives, about the rise of "woke capitalism." Bud Light came under scrutiny from the right when it partnered with the transgender influencer Dylan Mulvaney for a small-scale Instagram campaign last spring. Then Target took heat about its Pride merchandise , with some customers destroying displays in stores over a campaign it has run for years. These high-profile examples spooked companies, which are now afraid to poke the hyped-up right-wing bear. In the market, ESG funds haven't been doing so hot . According to Morningstar, investors pulled $13 billion out of sustainable funds in 2023 amid underperformance and political unease.

"It's a bona fide countermovement against both ESG and DEI," said Philip Mirvis, an organizational psychologist and research fellow at Babson College's Social Innovation Lab. "Certainly for businesses, this is about making money. And in the conventional logic, all of these issues represent risks."

After last year's Bud Light debacle, which was a real blow to its business , executives fear they'll be the next target of some anti-woke outcry. In a 2023 Conference Board survey of more than 100 large US companies, almost half of respondents said they'd gotten some ESG backlash, and nearly two-thirds said they expected the problem to persist or get worse over the next two years. Jones told me the surveys suggest companies are antsy about mentioning DEI too much, too. He said it's not necessarily the case that companies aren't doing any work on sustainability and diversity, but they're definitely changing how they talk about it.

The chilling effect is palpable. Fink won't say "ESG" anymore because, he says, it's been "weaponized." Asset managers are quieting down on ESG as part of a "greenhushing" trend. Some companies that made a big deal about their DEI efforts in 2020 are downsizing those, too . Data provided to me by FactSet, a financial-data company, shows that mentions of ESG and DEI in S&P 500 companies' quarterly earnings calls with analysts have taken a nosedive over the past few years. For the fourth quarter of 2020, 131 companies mentioned ESG, and 34 mentioned DEI or diversity and inclusion. For the fourth quarter of 2023, those numbers dropped to 28 and four.

While the backlash has certainly driven the quieting, in some cases companies are talking less about their social commitments because they got out over their skis on their pledges. Companies such as AIG, Amazon, and ExxonMobil have scaled back some of their climate initiatives.

"We saw a lot of companies make very bold commitments — we're going to be net-zero emissions by whatever date, 2040, 2050," Jones said. "And often those commitments came but there wasn't always the underlying work."

Alison Taylor, an associate professor at New York University's Stern School of Business who wrote the book "Higher Ground: How Business Can Do the Right Thing in a Turbulent World," told me that, in her view, corporate America's about-face isn't as abrupt as it seems. C-suites have become more Republican over the past decade, and in loudly proclaiming to be do-gooders, companies have also drawn attention to their political donations, which often don't align with their rhetoric. Additionally, the issues dominating political and social discussions are much thornier than they were in the recent past — speaking out against white supremacists in Charlottesville is a bit of a gimme, weighing in on the Israeli-Palestinian conflict is not.

"Now what we've got is the end of Roe v. Wade, and we've got the Middle East, and we've got issues where they're much, much more divisive and difficult," Taylor said.

Taylor, a longtime skeptic of CEO activism, isn't surprised the friendly-corporation-next-door schtick has gone awry, but it has clearly caught some employees unawares. Some corporations have encouraged the creation of employee resource groups, which organize people by social identities and beliefs and in some cases embolden them to push for change. Google workers have previously participated in walkouts and protests and kept their jobs . Many were bewildered to find that this time around, the company was no longer having it. Instead, it's firing those protesting and reminding everyone, "This is a business."

"A company is not a democracy, and so all these leaders wanted to imply it was a democracy when it suited them," Taylor said. "Now it doesn't suit them."

It's unclear whether this trend of companies trying to stick to straight business is a blip or a more permanent reversal. Bud Light and its parent company, Anheuser-Busch, have generally steered clear of anything that might be read as controversial since the Dylan Mulvaney debacle; their main message since then has been "We love America." Target told me it didn't have anything to share on its 2024 Pride plans yet, but it has publicly acknowledged it's likely to make some modifications.

A company is not a democracy, and so all these leaders wanted to imply it was a democracy when it suited them. Now it doesn't suit them.

Many of the people I spoke to for this story described executives as more on edge because of the election this year; come 2025, that may ease. The anti-woke crowd is extra fired up about certain issues right now, but that may not last — attention spans are short, and hot-button issues are constantly changing.

Still, companies' backing down on sustainability and diversity efforts, even temporarily, could prove short-sighted. Sure, you saved yourself a headache now, but in the long run, setting up a business to weather the climate crisis is a good bet. So is hiring diverse workers and appealing to new demographics. Despite the controversy last year, at the heart of Bud Light's campaign was an understandable business decision: It wants to appeal to a younger, more diverse consumer base.

Underlying this all is one central question: Just how "woke" are companies anyway?

Commitments to social responsibility are never far-reaching, said Kenneth Pucker, a former Timberland chief operating officer and current professor of practice at the Fletcher School at Tufts University. "It's always on the margins because the main goal of executives — the real responsibility, the way the structure of the system is organized, the way incentives work, the way the rules govern — is money making."

This may be a great un-wokening, but maybe corporate America was actually never that committed to the idea in the first place.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.

About Discourse Stories

Through our Discourse journalism, Business Insider seeks to explore and illuminate the day’s most fascinating issues and ideas. Our writers provide thought-provoking perspectives, informed by analysis, reporting, and expertise. Read more Discourse stories here .

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IMAGES

Business Plan Mistakes: The 6 Biggest Mistakes to Avoid
40 Common Business Plan Mistakes to Avoid when Writing your Plan
40 Common Business Plan Mistakes to Avoid when Writing your Plan
40 Common Business Plan Mistakes to Avoid when Writing your Plan
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17 Key Business Plan Mistakes to Avoid in 2024
5. Not doing enough research. You don't need to spend endless time researching, but your business plan should demonstrate that you truly understand your industry, your target market, and your competitors. If you don't have this core knowledge, it's going to show that you're not prepared to launch your business.
Nine Common Business Plan Mistakes To Avoid As A New Entrepreneur
4. Failing To Research The Target Market. One business plan mistake that new entrepreneurs often make is failing to research their target market properly. They may have a great product or service ...
11 Common Business Plan Mistakes to Avoid in 2024
When your plan is done, your company is done. Do a lean plan and keep it fresh. 3. Losing focus on cash. Most people think in terms of profits instead of cash. When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be.
7 Common Business Plan Mistakes
When writing your business plan, you should avoid the following: Poor grammar and wording. Not every business person is an eloquent writer, but that's not an excuse for errors in your text. Seek the help of an editor to review the plan, especially if you struggle with grammar and verbiage. Enlist additional reviewers, such as friends, family ...
How To Write A Business Plan (2024 Guide)
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
Developing A Business Plan? 11 Common Mistakes New ...
8. Analysis Paralysis. A common mistake I see is analysis paralysis. Although a business plan is important, doing is more important. Too many entrepreneurs get trapped in the preparation. Their ...
How to write an effective business plan
5 common business plan mistakes to avoid. While there isn't one single way to write a business plan, you can save yourself time, money, stress and (maybe) your business by avoiding some common ...
Common Mistakes to Avoid When Writing a Business Plan
Crafting a business plan is a delicate balancing act. It demands a deep understanding of your market, a clear value proposition, realistic financial projections, a competent team, and the flexibility to adapt to changing circumstances. All too frequently, an entrepreneur or business owner may lean on a business plan template or outsourced ...
Top 10 Business Plan Mistakes
10 mistakes you want to avoid when creating a business plan. When it comes to creating a business plan that attracts investors, these tips will help you get it right the first time.
Common Business Plan Mistakes
Not Checking Numbers. If your executive summary states you want $158,000 and your financial statements show you need $190,000, your banker will question your competence. Every number must match in every section of the business plan. Another example, if you discuss having three employees, but your cash flow shows only salary/benefits for one ...
Seven Common Business Plan Mistakes
Seven top business plan mistakes: 1. Not making one. As an entrepreneur, surely you're more excited about doing the thing you want to do that writing a plan about it. But recall the wisdom of Yogi Berra: "If you don't know where you're going, you'll end up somewhere else.".
The Most Common Business Plan Pitfalls and How to Avoid Them
Every company benefits from an updated business plan. While it seems necessary for start-ups, it applies to established firms, too. An efficiently written business plan keeps the whole business on track in the process of execution of the company's strategy and reaching its business goals. Business plan mistakes can result in anything ranging from small […]
10 Common Business Plan Mistakes
One of the most common business plan mistakes is overestimating the value of your company. Ensure your plan is pragmatic and explain your projections. This way, lenders and investors are much more likely to accept your plan, knowing you're thinking logically. 2. Not Defining a Target Audience.
Business Plan Mistakes
Often you may hear about what a business plan consists of. While including the necessary items is very important, you also want to make sure you don't commit any of the following common business plan mistakes: 1. Putting it off. Don't wait to write a plan until you absolutely have to. Too many businesses make business plans only when they ...
Common Business Plan Mistakes to Avoid
Common Business Plan Mistake #5: Not Analyzing the Competition. This is probably one of the most common business plan mistakes. There is a fine distinction between being convinced that your service or product is good and having a distorted view regarding how your offerings measure up against those of your competitors.
11 Important Business Plan Mistakes to Avoid in 2024
Top 11 Common Business Plan Mistakes to Avoid. 1. The Plan is Poorly Written. Spelling, punctuation, grammar, and style, SWOT analysis, and strategic planning are important when it comes to getting your business plan written. Investors are looking for clues about the underlying business and its leaders when they're studying your plan.
A Beginner's Guide on How To Make a Business Plan
Describe your company, its mission, and vision. Identifying the "why" of your business is a crucial step in learning how to write a business plan. There are two ways of articulating that "why.". One is your company's mission statement — a brief explanation of what you hope to achieve by starting or growing your business.
The Most Common Business Plan Mistakes
There are two common mistakes people make when they're tackling this section of the business plan. The first is not being realistic about their expenses. People often leave out expenses entirely or underestimate the cost of particular expenses. Meticulous research will prevent this mistake.
10 Common Business Plan Mistakes and How to Avoid Them
Here are 10 of the most common business plan mistakes I have come across: 1. Boring Executive Summary. Investors, bankers, and other business plan readers usually start looking at the executive summary. It should highlight the most important points of the business plan in a pithy way. The business plan should provide a convincing story on how a ...
7 Common Business Management Mistakes and How to Avoid them
So, if you've got a great business idea and are determined to bring it to life, then this article is here to help you avoid the 7 most common business management mistakes. 1. Failing to track everything. From day one of building your business, you're going to be experimenting, creating data and processes, and learning.
Mistakes to Avoid When Starting a Business
8. Avoiding contracts. "One of the biggest mistakes a business owner/entrepreneur can make when starting a business is the failure to implement contracts. No matter how good relationships may be ...
4 Common Mistakes New Small Business Owners Make Financially
This article explores four of the most common financial mistakes new small business owners make and how to avoid making them. 1. Not Having an Emergency Fund. ... Finally, you need to have a good business plan in place if you hope to have an easier time getting everything done. A business plan essentially outlines the steps that you need to ...
5 reasons small businesses fail (and how to succeed)
Certain mistakes are costly enough to cripple your business before it has much of a chance. In this article, we're going to cover five critical reasons small businesses fail, so that you know ...
10 Major Mistakes People Make Starting a Small Business
Getting a small business successfully launched requires patience and proper planning. We cover the most important steps that you can take to ensure that your small business isn't implicated by ...
The Most Common Small Business Mistakes
According to one report, 38% of businesses fail because they run out of cash. All companies are dependent on cash flow. But managing money is not a skill that all small business owners have. Some ...
3 Biggest Gut Health Mistakes People Make: Gastroenterologist
A gastroenterologist shared the three biggest mistakes people make when trying to take care of their gut health.. Gut health is a buzzy topic: rates of colorectal cancer are rising among under-50s ...
Money latest: Mortgage rates could go lower than expected, BoE hints
The Bank of England has hinted a base rate cut is coming, and it's "not ruled out in June". Read all today's personal finance and consumer news - and listen to the latest Ian King Business Podcast ...
Corporate America Is Going Un-Woke: Reversing DEI, Sustainability Plan
Instead, it's firing those protesting and reminding everyone, "This is a business." "A company is not a democracy, and so all these leaders wanted to imply it was a democracy when it suited them ...
Starbucks just had a 'disappointing' quarter. Here's how it plans to
Starbucks is brewing a turnaround plan that involves speedier service and expanding the number of promotions after its most recent quarter was "disappointing," in the words of its own chief ...
Sony and Apollo plan to break up Paramount, NYT reports
Sony Pictures Entertainment and private equity firm Apollo Global Management plan to acquire Paramount Global for $26 billion and break up the company, the New York Times reported on Wednesday ...