Entrepreneur: Seven common errors when writing a business plan

By Adam Toren

Compiling a formal business plan can be a daunting task for an entrepreneur.

The reality, of course, is that these documents are a necessity for any company. And, to be honest, they’re not as hard to put together as you might think. (There are plenty of good books on the subject and some really great software packages, such as Business Plan Pro.)

Still, there are some common errors entrepreneurs face when writing a business plan.

Procrastination. It’s easy to find distractions (such as your busy schedule) to prevent you from creating a plan. Resist them. And realize that without a document detailing plans for the future, your company is likely to become a rudderless ship at some point.

Financial focus. Think in terms of cash rather than profits. Initially, your profit and loss statement should be secondary to your cash flow statement. You’ll need to initially ensure you have enough cash on hand on a day-by-day basis to survive.

Cover your bases. Don’t focus too much on your grand idea, but make sure that you have all the fundamentals covered. Bold ideas are hard to sell. Rather, stress that you have the available time, common sense and business smarts to succeed. If you are looking for investors, they will be more interested in you and your people than the idea. (more)