Anyone serious about their startup aspirations will be keenly aware of the importance of having a watertight business plan. As a way to convey your vision and your strategy for success, plus the operational mechanics behind your business, it’s an integral document for those crucial formative years.
Not only that, but your business plan can be your ticket to winning over investors and accessing much-needed finance.
Indeed, of the thousands of businesses who launch every year, many will fail due to a) not having a sufficient strategy (i.e. a business plan) in place and b) not having sufficient finances in place.
The two, in a way, go hand in hand. How can you expect to get funds in place if there’s not enough evidence in your business plan that you will be a good investment?
So, if you want to know how to start a business in the UK – and be a success – you’re going to need to know what mistakes to avoid when putting together your business plan.
1. Overcomplicating things
A business plan can be daunting to thing to start on. The mistake many entrepreneurs make is to treat it as something that will be daunting to read too. Yes, it should be a serious piece of work and serve to enhance your credibility, but it’s goal shouldn’t be to make you look clever.
Nothing is more irritating than reading a business plan that is all style no substance. Using overly elaborate language and buzz words instead of plain English might just raise question marks in the readers mind that you’re all talk and no walk.
2. Not telling a story
This might contradict a little with the last point. You need to tell a story in your business plan. People like stories. It’s simple. If you have a compelling story, it can really win over an investor who might be sitting on the fence.
Now that might not be the main purpose of your business plan but you need to include some elements that frame your idea and plan in a human context: How did you arrive at the idea? How will it positively impact on the lives of your customers? If you’re too abstract you it just won’t cut through.
3. No personal stake
Investors and funders hate it when they’re the only ones putting money or time at stake. If you’re not willing to make a sacrifice to ensure the success of your business, how can you expect an outsider to? It also paints a picture that you’re not entirely serious or, even worse, you actually don’t believe in your business.
Put yourself on the line, on the other hand, and it shows you’re dedicated and passionate.
4. Not doing enough research
One of the key parts of a business plan is to demonstrate you’ve got a solid understanding of the market and the competitive landscape – and how your business fits into it. For that, you need to do a fair amount of research.
Nope, not just a quick Google search or something you read in the paper once. You need to tap into the masses of readily available data out there to paint a vivid picture that includes economic factors, trends, customer insights and your competitors. You know what they say “When you assume, you make an …”
5. Numbers not adding up
Parts of your business plan such as your sales forecast and budget can pretty difficult to tackle. For those of us not so good with numbers, you can really get bogged down in this stuff. But, it needs to be done.
And it needs to be done right. Having a handle on your finances is such a crucial part of business, if you can’t get it right on paper – then it doesn’t bode well for real life.
6. Being unrealistic
Leading nicely into our next point. People love big numbers and ambitious proclamations. “By Year 2 we’re going to be turning over well over a million pounds and be the biggest independent chimney sweep operator in the Western World”… really? Going overboard not only piles on undue pressure but can lead to you looking, well, just plain silly. Tone it down, be ambitious but realistic.
7. Sloppy presentation
We don’t want to spend too much time on this one but it needs to be said: your business plan should look polished. That includes spelling and grammar. First impressions count. You don’t want to be in a position where you’ve instantly turned off the reader because your business plan is sloppily presented.
Get someone else to read through and give feedback – it really helps to have a second pair of eyes. That said, don’t worry too much about fancy design flourishes, just make sure someone can actually read the damned thing.
Sarah left her career as an analyst at one of Britain's top freight companies to pursue her calling as a freelance writer. She typically writes reports and articles on the latest developments in the startup industry, CSR strategies and role of micro businesses in the UK economy. When she isn't researching or writing she can be found at the forefront of a beach clean with her lurcher, Archie.