Having a business plan is an important part of starting a new company that you cannot afford to skip. Regretfully though, simply having an established plan is not enough to guarantee success. Here are seven different areas that your business plan may be lacking in, and why those mistakes could be very costly to your company:
Not Enough Research
Diving into a new marketplace is a challenging endeavor. Doing so without the proper amount of research is suicidal. Make sure that you thoroughly understand your field before investing in your new business.
No Distinct Focus
You may have constructed a pretty comprehensive business plan outlining your business idea, but no specific goals or ways to achieve them. This can leave you spinning your wheels but not going anywhere.
All Planning, No Doing
Inversely, some entrepreneurs spend all of their time planning their new business. While thoroughly planning your new business is crucial, it’s also vital that you take action. All planning and no doing may cause your startup to be forced to alter plans before even getting off the ground thanks to constantly changing market conditions.
You’re Not Really Connecting With Your Customers
Understanding your customers and their needs is one of the first things that any new business needs to do. Just providing a new product won’t cut it – you need to understand why your customers want this product, what will make them choose you over your competition and how to keep them happy after the sale.
Less-Than-Optimal Location
If you’re opening up a retail location or professional office, location is still key. While the advent of the internet has made business location less important for many companies, it is still crucial in a number of industries. Even if your business may not need a prime location to garner foot traffic from customers, selecting a location that benefits the distribution of your products or services (such as having direct access to a major roadway or interstate) can save money and time as your business grows.
Not Enough Focus On Your Finances
Too often, new entrepreneurs get so caught up in the day-to-day operations of their
business that they begin paying less attention to the money coming in and going out each month. While starting a new company can be time-consuming, maintaining your financial focus early on is needed if you plan for your business to outlast the start-up phase.
Too Much Focus On The Front-End
Obtaining new customers may be important, but so is retaining the customers that you have already gathered. Repeat business is much easier and cheaper to get than new customers are, and cultivating relationships with previous customers can be more beneficial in the long-run than most other marketing efforts.
Your Plan Is Too Rigid
No matter how good your business plan is, be open to change. The business world is quite dynamic, and companies that aren’t able to adapt to new developments and trends can quickly become antiquated.
Too many entrepreneurs feel that by simply creating a business plan, their company will draw in investors and have a strong focus. In reality, your business plan is only as strong as you make it, and too often important sections are missed or not given the proper focus. By developing a more comprehensive business plan, your company can avoid a number of the shortcomings that mean disaster to thousands of new startups each year.
