You’ve got a winning business idea. You’re excited, inspired, and poised to take the plunge (congratulations, by the way!). Next step: write a business plan.
Unfortunately, Googling “writing a business plan” yields an intimidating 99,600,000 results. There’s an abundance of tips on how to craft executive summaries, marketing plans, and projections. While these are all fundamental pieces of a business plan (and you should definitely do them), there’s a little more to it than that. A stellar business plan spreads a little magic, leaving its reader eager to get involved.
To help you whip up your own dash of brilliance, let’s look at (and learn from) some of the common mistakes budding entrepreneurs make when penning their plans.
Common Mistake #1: Thinking You Don’t Need to Write One
Before we get practical, let’s take a step back and get clear on the point of writing a business plan.
Well, what is the point?
A lot of entrepreneurs think they only need to develop a formal business plan if they’re seeking investment. This is a costly folly. Writing a business plan gives you a chance to thoroughly evaluate your idea inside and out, uncover its upsides and potential pitfalls, and, most crucially, think up ways to avoid them before they happen. It’s your chance to stare long and hard at your ideas’ weaknesses and decide whether or not you can overcome them.
And sometimes, you won’t be able to. I’ve written two business plans that uncovered insurmountable obstacles and made me realize my idea was completely impractical. It was a valuable pressure test that saved me time, energy, and money in the long run.
On the other hand, if you conclude that you can overcome any potential pitfalls, you’ll be rewarded with an unshakable conviction that your idea can (and will) succeed. And believe me, you’ll need it! As an entrepreneur, you’ll be tested in ways you never thought possible.
Common Mistake #2: Speaking in Features
All too often, people pitch their business ideas by rattling off a bunch of features. They tell you what their product does and how it works, including how it has more power, more muscle, more buttons, more everything—than the competition.
But they seem to miss a crucial question: Why? Why will people care? Why does it matter that this business exists at all?
This is the juicy stuff. The answer to this question is what drives customer loyalty; it’s what makes people pay more for your product than cheaper, similar offers from competitors. It’s also the backbone of the communities that people believe in and want to be a part of.
For example, Dollar Shave Club exists to stop big brands from robbing us blind (in the form of expensive razors). So, the company will ship you cheap razors each month. Could just you as easily buy them at the store? Of course. But it’s a concept people buy into, and it’s delivered with an infectious attitude that customers are eager to adopt.
And what about Zipcar? This car rental service is on a quest to reduce car ownership. Are the company’s vehicles top-of-the-line Hummers with all the bells and whistles? No—but that’s not what’s important. The company is selling a mission, and ultimately, its customers care a lot more about that than fancy features.
Common Mistake #3: Writing Your Business Plan in a Vacuum
It can be hard to project what the future of your business will look like. Plotting out best and worst case scenarios is a worthwhile exercise and a great place to start, but it’s really just the beginning—the real learning happens when you turn to other companies who’ve done it before and borrow their recipes for success.
So with your detective hat on, spend some time looking at analogous businesses that—admit it—you’re a little jealous of. How exactly did they get there? What did they refuse to compromise on? What did they ruthlessly go after? The trick here is to hone in on what made these companies successful—then apply those general concepts to your own idea.
It’s also worth thinking beyond the scope of your industry and seeking inspiration from worlds outside your own. For example, when I was first setting up my business, Never Liked It Anyway, it was clear that the site had more in common with He’s Just Not That in to You than it did eBay. Following this logic, I started looking into entertainment platforms to see what lessons I could adopt. It was incredibly helpful and shed light on a direction for my business that I would never have considered otherwise.
Sometimes when you’re writing a business plan, it can feel like you’re pulling information out of thin air—especially when it comes to the numbers. But learning about the successful strategies of the masters that went before you is a great way to ground your projections and expectations in reality.
Common Mistake #4: Only Looking to the Near Future
When you write a business plan, you’ll need to spend some time in the weeds of detail, but you should also take time to stand on a tall balcony overlooking the entire garden.
What I mean is this: Set aside the number crunching for a while, and take time to analyze the bigger picture. What do you want your business to be known for 10 years down the road? What do you want to go down in history for? Think beyond just the immediate impact of that product—after all, Steve Jobs won’t be remembered for inventing the iMac, but for completely revolutionizing computing.
This kind of unbridled ambition is the lifeblood of entrepreneurship. We don’t just want to make cool stuff—we want to change things, and change them for the better. And above all else, a business plan should capture that sentiment on every page.
When you sit down to write your business plan, include the standard elements, of course—all the usual suspects like the situation analysis, forecasting, and operations strategy are critical. But be sure to leave some room for the magic. It’s the bit that will get you investors, loyalists, buzz, and most of all—personal conviction.