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Business Plan and Start Up Newsletter Issue #1029-Business Plan Mistakes
April 20, 2006
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Business Plan And Start Up Newsletter
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April 2006
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Written by Shaunta Pleasant
President, TL Manage Inc.
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Business Plan Pro 2006...

Everything banks; lenders and the SBA look for! Produce your business plan quickly and easily... For entrepreneurs and small-business owners. Business Plan Pro 2006

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********Table of Content********

Business Plan Mistakes...

Business Plan Success Tips for Entrepreneurs and Small Business Owners...

A Few Cool Helpful Notes...

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The Importance Of A Business Planning Blog

Business Plan Mistakes
By Palo Alto Software, Inc.

Often you may hear about what a business plan consists of. While including the necessary items is very important, you also want to make sure you don't commit any of the following common business plan mistakes:

1. Putting it off.
Don't wait to write a plan until you absolutely have to. Too many businesses make business plans only when they have no choice in the matter. Unless the bank or the investors want a plan, there is no plan.

Don't wait to write your plan until you think you'll have enough time. "There's not enough time for a plan," business people say. "I can't plan. I'm too busy getting things done." The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.

2. Cash flow casualness.
Cash flow is more important than sales, profits, or anything else in the business plan, but most people think in terms of profits instead of cash. When you and your friends imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be. We are trained to think of business as sales minus costs and expenses, which equal profits. Unfortunately, we don't spend the profits in a business. We spend cash. So understanding cash flow is critical. If you have only one table in your business plan, make it the cash flow table.

3. Idea inflation.
Plans don't sell new business ideas to investors. People do. The plan, though necessary, is only a way to present information. Investors invest in people, not ideas.

Don't overestimate the importance of the idea, particularly the importance of the uniqueness of the idea. You don't need a great idea to start a business; you need time, money, perseverance, common sense, and so forth. Very few successful businesses are based entirely on new ideas. A new idea is much harder to sell than an existing one, because people don't understand a new idea and they are often unsure if it will work.

4. Fear and dread.
Doing a business plan isn't as hard as you think. You don't have to write a doctoral thesis or a novel. There are good books to help, many advisors among the Small Business Development Centers (SBDCs), business schools, and there is software available to help you (such as Business Plan Pro, and others).

5. Spongy, vague goals.
Leave out the vague and the meaningless babble of business phrases (such as "being the best") because they are simply hype. Remember that the objective of a plan is its results, and for results, you need tracking and follow up. You need specific dates, management responsibilities, budgets, and milestones. Then you can follow up. No matter how well thought out or brilliantly presented, it means nothing unless it produces results.

6. One size fits all
Tailor your business plan to its real business purpose. Business plans can be different things: they are often just sales documents to sell an idea for a new business. They can be detailed action plans, financial plans, marketing plans, and even personnel plans. They can be used to start a business, or just run a business better.

7. Diluted priorities.
Remember, strategy is focus. A priority list with 3-4 items is focus. A priority list with 20 items is something else, certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.

8. Hockey-stick shaped growth projections.
Have projections that are conservative so you can defend them. When in doubt, be less optimistic.

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Business Plan Success Tips for Entrepreneurs and Small Business Owners
By

Daryl Des Marais

What does it take to convey your idea to financiers?
- How will you organize all that information? What you need is a clear outline and focus.
- First you must identify your audience. Who are your potential stakeholders.
- Rank them according to importance, but most importantly have a plan on how they affect your future business.

In terms of an effective and well accepted layout, the following is a good start.

Business Plan Layout

Exective Summary - Who are you and what are you planning to do?

Company - Where is your company located and what's your specialty?

Product or Service - what is your service and why is it better.

Market - Who are you distinctly selling your product to and why will they buy it?

Competition - Who is your competition in terms of product, pricing and placement strategy in and outside of your local area?

Sales and Marketing - How, where, when and to who are you going to sell your product or service and what makes it special?

Operations - Who will be operating your company, managing and what systems will be in place?

Financials - How much money do you need to operate your company in the next 6 months to 5 years?, How will you spend it specifically?

Appendix -pertinent information, contracts, references, etc.

Business Growth Coaching Solutions @2005

For more information on an effective business plan layout check out http://www.usabusinessgrowth.com/proposalpack.html

Mr. Des Marais has operated small businesses for over 20 years. He has been a consultant and held positions in some of the fastest growing companies in Canada.

He has held past management positions in retail, tourism, hospitality and sales for a variety of companies. He has increased sales by 200% in 2 months for an herbal doctor; increased sales by 30% in 4 months for a major Canadian Big Box Retailer; 200% sales increase 3 times in a row for a service-based small business and helped several entrepreneurs develop and sell their business.

His expertise is in the area of growth and business development. He has also been involved in developing business chapters in cities across Western Canada.

In terms of charities he has been involved with several groups including Habitat for Humanity, United Way and local city soup kitchens.

Article Source: http://EzineArticles.com/?expert=Daryl_Des_Marais

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A Few Cool Helpful Notes

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P.S. April rain equals plenty of time (indoors) to get things done :-)

Shaunta

http://www.tlmanage.com
http://www.yourbusinesspal.com 

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