What Mistakes to Avoid When Writing a Business Plan

When an organization prepares to raise money from investors or banks they need to write a business plan. There are a lot of mistakes that people land up committing. A few have been discussed here.

Before sending or submitting a business plan to a bank or an investor, always send an introductory letter or an e-mail, you can also call them up. This way you can gauge whether they are interested in the industry and business or not. It would help you out a lot too, if you can attach a reference from an attorney or even a banker.

Once you know that the investor or bank has taken interest, send them the executive summary of the plan, unless of course they ask for the entire plan.

The first bit to which maximum attention is put is the executive summary. So, make sure that it is practically flawless. It shouldn't be very long, perhaps two pages long.

You can break down the summary to make it easy to understand. The categories may be: the need in the market, what you can provide, how good your staff is, the market you are targeting, capital.

Make sure your financial projections are realistic. A company can not always go on making humongous profits. If assumptions are to be made, make them as reasonable as possible.

Don't come across as a greedy organization in your business plan. Try and be as fair and reasonable. Spend little time thinking over the valuation and concentrate more on the structuring for better future deals.

Majority ownership shouldn't ever be equated with control. You never know, you might just sell some non-voting stocks which do not give the control of your business away.

You may read more at: How to write a Start Up Business Plan and How to Write a Business Proposal.

Dixita is an article writer for various organizations across the globe. This is the first time I am trying out article writing for myself. For more information about me, do visit: How to Write a Business Plan.

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