When you take the big step to entrepreneurship, the business plan becomes a key tool for the launch and growth of your business. But how is it done? In simple terms, it is a document in which you will write the philosophy, characteristics, and objectives of your company. It must include operational, commercial, and financial aspects. It will be the map that will guide you on the road to the success of your business.
But don't panic, it's not written in stone and you can adjust it as many times as necessary, according to the actual behavior of your strategies. Much of the value of this document is due to the fact that it is one of the requirements when looking for investors, grants or to apply for small business loans.
Camino Financial, a company experienced in business loans, says that the business plan must be able to speak for you, it is the face of your company, so you must take special care in its development. It must show that your company's goals are realistic and achievable, especially in the financial part. Otherwise, it will only be a letter of good intentions.
Why would a business plan fail?
Business plans are not infallible, so we made a list of 6 reasons why a business plan can fail. Take them into consideration before submitting this document to any institution. Develop a solid, fail-safe business plan.
1. Lack of product analysis
Before investing in an idea, analyze the viability of your product or service. In your business plan, break down the manufacturing and operating costs to identify profit margins. Remember that a company's success is due to the solution it offers to a problem; if it does not fulfill this characteristic, it will not be able to compete. If you skip this step, you will be putting your capital at risk and wasting time on a product with no potential.
2. Ignoring clients or potential customers
Since you found the added value of your business and you have identified your target market, it is now necessary to validate your product or service. Start with your close circle and ask: does it meet your quality expectations regarding cost? What change would you make to improve it? Does the presentation meet your needs? Listen and analyze the comments before discarding them.
3. No showing real expectations
Nothing gives greater clarity in a company than numbers. Avoid making unrealistic projections or creating false expectations. The numbers will always be your best allies, it is not enough to be in love with your project for it to be successful. Remember that illusions can blur your business vision, make projections in the short and medium-term, and prepare a budget to determine your source of financing, either from your own resources or from small business loans.
4. Not aligning objectives with strategies and operation
Planning is the key to success for every business. It generates objectives and develops real strategies to reach them. Once you start implementing them, remember to measure them to evaluate their viability. If you stop analyzing and measuring periodically, you could be working for years on something that won’t work.
5. Lack of financial projections
Financial projections are an analysis that allows you to calculate the return of investment and the development of your economic objectives in a given time frame. It serves to anticipate losses or to make modifications to your business strategy. These numbers will be determining factors when applying for small business loans and identifying your possibilities of getting into debt.
A business plan is the compilation of all the important aspects of your company: mission, vision, philosophy, objectives, investor financing, access to small business loans, business model, costs and marketing. Every aspect is equally important and you should put the same effort in each one to generate a successful project.
With the well-crafted document, approach institutions like Camino Financial that will support you with advice and facilitate access to small business loans to strengthen your company and achieve all your goals. Have you already prepared your business plan, what has been the most complicated part of it?