Writing a business plan for your business is an important part of any startup business plan. As we all know, the business plan is a tool for understanding of how your business is put together. You can use it to monitor the progress of your business and can be used to control the business’s fate.
Without the business plan, the chance for your business to fail will increase. The Same result also goes to committing mistakes when writing a business plan, it can bring your business down and you will have a hard time bringing it up again and starting a new chapter.
Business Plan Mistakes and How to Avoid Them
Below are the common mistakes in writing a business plan.
- The business plan does not address the risk. There are still business plans that rarely address the risk that can have a huge impact on their business. Or even if they have a risk management section in their plans, it is often too generic and not really focused on the risk. The risk should always be outlined in the business plan along with the company’s plan to control the risk.
- No clear purpose of the business plan. Many businesses fail to define the importance of their business plan. Some of it is too vague and some of it is too unrealistic. The business plan should be the solution of the problem, and solving the problems should be one of the main purposes of the business plan.
- Not doing enough research. All the information in your business plan should be backed up with a strong research, your business plan will be as good as the research you put into it.
- It is too long. There are business plans that end up way too long. The business plan is created to focus on the most important business matter and it does not necessarily to be 20–30 pages.
Distribution Channels that Affect Your Business
The distribution channels are simply the ways on how you get your products or services into your customer’s hands. It describes how it is delivered to the target markets. There are various distribution channels that affect the marketing plan of your business. These are the:
- The retail distribution. This use intermediary such as a wholesaler or distributor to deliver products directly to retailers.
- The wholesalers. The process of wholesale involves purchasing a product from manufacturers at a deeply discounted price
- The distributors. This directly delivers products to retailers.
- The direct sales. The direct sales force the manufacturers to deliver product directly to the consumers.
Financial Projection in Business Plans
The financial projections in your business plan should be written after you have analyzed the market and set out clear objectives for your business plan. This is when you can allocate the resources efficiently.
Include this two critical financial statements in your business plan packet.
- Historical financial data. This data determines the financial performance of your business. The historical financial data includes income statement, balance sheets, and cash flow statements.
- Prospective financial data. This data determines your business’s capabilities for the next five years. The prospective financial data involves forecasting income statements, balance sheets, cash flow statements, and capital expenditure budgets.