Avoid common business plan mistakes

A business plan isn’t just useful for loan applications. It is an invaluable management tool that helps you set clear objectives for your company and describes how you'll achieve them.

But many entrepreneurs make avoidable mistakes when building their plans. Follow these five tips to create a plan that works.

1. Use solid data

A solid business plan depends on solid information. It’s common for entrepreneurs to neglect to include accurate, detailed data and forecasts about sales, costs and start-up requirements, such as financing, hiring and real estate. This data should drive all of your business objectives and strategies.

2. Include supporting information

Backing up your assumptions is crucial for an effective business plan. Include supporting information, such as feasibility studies, surveys, market analyses, information about key competitors and industry overviews.

3. Make it clear

Keep your plan clear and concise. Bankers want to see the facts, but avoid overwhelming the reader with irrelevant data.

4. Don’t forget HR

Business owners often overlook human resources management in their plan. HR poses many challenges to entrepreneurs, especially during a tight labour market. Your plan should outline your recruiting and outsourcing strategies and organizational structure.

5. Set measurable objectives

Setting goals for your business will help you to get your team focused and taking action to achieve your vision. Having measurable targets will help you monitor your progress.