The process of creating a plan is an important part of the decision making process. It takes preparation, due diligence and research to create a great plan. A good plan creates strategic direction that leads to success. The key components are uncertainty management and communication among team members
Planning is an important part of the success of any project. Without a plan, it’s difficult to know what needs to be done and how best to do it. The importance of good planning will make your company more successful.
I’ve recently spent a lot of time reviewing and assessing business proposals for a well-known MBA program’s business plan competition. I’ve read some fantastic proposals and some not-so-great ones, but that’s how any business plan competition always works out.
I felt it would be helpful to discuss the most prevalent flaws that have been discovered throughout the reading of these plans.
Executive Summary – Business plan writers are often so engrossed in their company and its idea that they forget that all of the plan’s possible readers aren’t industry specialists. Many of the executive summaries I read assumed some level of industry expertise, and in some instances, even understanding of the firm and business model. Executive summaries should be brief, to-the-point, and present a high-level summary of the business opportunity. The concept of a “elevator pitch” is crucial in this situation. In no more than five phrases, a solid strategy will describe what the firm does, who the target market is, and what the potential upside is.
Expenditures — One of the most typical mistakes in company plan financials is underestimating or omitting some expenses entirely. Several proposals I recently reviewed failed to account for any human expenditures. If you’re bootstrapping your firm, this is great, but it has to be described explicitly in the supporting content. On the other hand, don’t talk about a sales team and then forget to include in the expenditures of that team in your personnel budget.
Make sure your P&L contains all of your fixed expenditures for operating your firm when it comes to spending. You’d be shocked how many individuals neglect about things like rent, insurance, and website hosting fees, among other things.
Optimism – While optimism is a desirable trait in any entrepreneur, it may be a little hindrance when it comes to planning. While it may be tempting to produce a sales estimate that indicates exponential growth, be sure your projections are reasonable. Most readers of company plans will doubt what seem to be excessively optimistic growth estimates, so it’s critical to back up these assertions with content if they’re reasonable.
Market Size – Similar to my last point about optimism, it is quite typical for organizations to define their market in their plans excessively broadly. Plans that characterize their markets in the billions of dollars and millions of prospective clients are not unusual. While this isn’t always a negative thing, it’s critical to break down this massive market into manageable target groups or market segments. Divide your market into manageable divisions based on factors such as geography, client demands, age, and money. You’ll have a hard time putting the plan into action unless you have a credible market segmentation strategy and a marketing plan that targets that segmentation.
There are lots of other subjects worth concentrating on when creating a good business plan, but the four I’m going to address today are prevalent enough that they need to be discussed separately.
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A “good plan synonym” is a plan that has been well thought out. It will be easy to understand and execute. The plan should also have a clear goal, including the steps needed to achieve it.
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