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Risks When Writing A Business Plan

Posted by Brandy on June 19, 2013

There are a lot of benefits of writing a business plan. But, there are also a few risks to consider and keep in mind when you’re writing a business plan. First, don’t expect your business plan to be a crystal ball. Second, remember you’re writing a business plan, not a book. Third, beware of analysis paralysis. And, fourth, remember that your business plan represents you.

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Your Business Plan Is Not a Crystal Ball

The first risk is believing that everything in your business plan will happen exactly as you’ve written it. A plan is a guideline or roadmap you should follow. You need to be flexible. You may want to have a contingency plan for certain things in case they don’t work out as you had originally hoped. You may also want to add a contingency fund to your budget in an effort to plan for the unexpected.

You’re Writing a Business Plan, Not a Book

The second risk is actually writing too much for your business proposal. You could turn off your audience by adding too many details or making the document too long, too cumbersome, and simply too much to read in a reasonable amount of time. Your proposal should be thorough, yet concise with easy-to-understand terms, instead of lots of technical terms the readers may not know. One way to make sure your plan is thorough is to use business planning tools, such as software. Business planning software includes all the major sections of a business plan. Tips on keeping your business proposal concise include trying not to brag or impress the audience by showing them how much you know. Instead, remember to write an overview of each section of your business proposal.

Beware of Analysis Paralysis

The third risk is analysis paralysis. Sometimes entrepreneurs get so caught up in the business planning process that they never actually do anything to implement the plan. It’s easy to start thinking “I’ll start this new venture as soon as I do this or do that.” The to-do list for improving your business plan can go on forever.

Your Business Plan Represents You

The fourth risk of writing and presenting a business plan is especially important if you are asking friends and family to invest in your new venture. It’s tempting to make small tweaks to your proposal, especially the financials, so your new business looks even better to potential investors. However, it’s better for your reputation, and relationship with loved ones, if your business plan is honest and realistic.

When you’re writing a business plan, remember to stay flexible, be thorough yet concise, be ready to take action on your business proposal, and be honest and realistic about what your investors should expect.

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