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Posts Tagged ‘Business Idea’

For many entrepreneurs a business plan is key not only to develop an idea, but it is essential to get money from potential investors. Everywhere, especially online, there are many recommendations on how to develop business plans, from the most sophisticated to the simplest. From assembling a huge tomes filled with numbers and graphics to reports of a few pages with simple ideas. One thing that few people says is that business plans are really necessary to the extent you are willing to use them as a guide.

If formality is made by not only wasting time but stop take advantage. What follows are the 10 biggest mistakes people make when developing a business plan published by Entrepreneur magazine, in an article by Tim Berry. The Spanish version and spor account Crisis, Business and Money. See what you think.

1. Not understanding that planning is what matters, not just a document. Planning is a process to establish goals and performance indicators to track progress with the necessary corrections.

The plan itself is only a first step. This should be reviewed and revised several times. There is no need to leave printed unless absolutely necessary.

2. Write it all at once. The plan is a set of connected modules, as blocks. So, start anywhere and continue at another time.

First make the part that interests you, or which provides the most immediate benefit. You can be the strategy, concepts, market objectives, business deals, screenings, vision or whatever, just start and continue later.

3. Complete the plan. The plan was completed, then your business’s over. Their latest release is just in time for a given situation. The Business Plan must be alive and must be updated to reflect changes that have taken over.

4. Hide the Business Plan to your computer. The Business Plan is a management tool. Use common sense about what things should be shared with all their equipment, keeping things confidential, as the salaries of its employees, for example.

Try to share the objectives and results, using planning to build the spirit of collaboration and the team itself. That does not mean you should share your business plan, with people outside your company or business, except of course when necessary, such as when seeking capital.

5. Confuse cash flow with profits. There is a huge difference between the two. Utilities are an accounting concept, cash flow is money in the checking account.

You do not pay their bills every day with the utilities and if the money from the checking account. Receive payments from sales to run, can affect your financial situation, regardless if you have had earnings in the period.

6. Do not have focus. A Business Plan, which emphasizes three or four priorities is a plan with focus. People remember getting three to four points. A plan that actually list 20 priorities has none.

7. Supervalorizar business idea. What gives value to an idea not the idea itself, but the business or company that is built around it.

For an idea to work you need an entire process from finding the information, product construction, the sale of these, proper management of capital to have an adequate cash flow, among other things.

Write a Business Plan that shows you want to build a business around this great idea, or forget about it. One idea alone does not make a big deal.

8. No review or consider the details, the first 12 months. For details, means, finances, goals, responsibilities and deadlines.

Cash flow is very important, but you can not ignore the distribution of tasks to people, the definition of dates and specifying what should happen and who should make that happen. Those details really matter. A business plan without these details is a waste.

9. Making future predictions exaggerated and retail. It is planning, not to speculate. The details are very important start, but can be a waste of time in the long term.

How can we project a monthly cash flow in three years when its sales forecast is so uncertain? Sure you can conceptually plan every 5, 10 or 20 years, but planning can not be made monthly, beyond the first year. No one will believe in such projections.

10. Make predictions absurd. Nobody believes the overly optimistic sales forecasts. The absurdly high profitability forecasts usually mean you do not have a realistic understanding of your business expense.