Common sense should let you know if you are trying to start a business, you should not make the common business planning mistakes such as:
- Not being focused.
- Not writing a business plan.
- Not knowing your financial worth.
- Not knowing your target market.
These are just a few of the common mistakes people make when planning a business. With a written plan, you eliminate the possibility of losing your objective’s focus, which is getting your business off the ground.
Next, you need to know your financial worth. It would help if you did not overestimate the value of what you think your company will be worth in 2 – 3 years. Instead, project where it will be in a year from the start.
You also need to know your target market, your product or service, and what audience it fits. Knowing this little bit will give your business a much better chance of success.
Need A Pen
Not bothering to write a plan is the number one common mistake of planning a business. People who consider themselves to be an entrepreneur are go getters, active achievers.
They take the risk knowing the potential reward. When they have an idea in their head, they write it down.
We have all heard the proverb at some point in our lives “He who fails to plan, plans to fail.” Planning is the key, writing it down is the objective, and success is the goal.
Businesses without a plan typically fail.
Crystal Clear
Your business plan needs to be precise. Ask yourself why are you writing a business plan? Are you looking for a lender or investors for your current or future residential assisted living home?
Your business plan should be a solution to a problem you have encountered. Now you want to turn that problem into a vision of success.
Know if your business idea is financially sound and worth putting together a business plan. Start with these five questions.
- Do you know your competition?
- Have you done your research?
- Can your business make a profit?
- Do you know who your target audience is?
- Do you know what an income statement, cash flow projection, and balance sheet are?
Make sure your plan is clear and addresses what you are selling, whom you are selling to, and how your business will earn wages.
Knowing Your Competition
When you begin your research, you want to know who you are competing against in the industry.
Define which category your product best fits? Seek out experts in your industry who can teach you how to identify businesses like yours. Know that you have competition. Business is about supply and demand.
Does your product/service engage, entice, and evoke people to choose your business? How will your business stand out from others in the same industry?
Do the Research
The lack of research is a common mistake in business planning. Research is the glue to your business plan and is only as good as what you get out of it.
Check and double-check your research. When you are doing the research, you are answering questions such as:
- What is trending?
- How does my product/service meet the demand?
- How will we compete with the competition?
Answering these questions makes you better prepared. There is no negating writing a business plan if you want your business to succeed.
So, don’t discredit your business idea with outdated information from your research.
Base your time frame for generating a profit on the demand for your product. Your business should operate on producing revenue above the expenses.
Compare your net margin with your competition.
Your net margin looks at the total sales, subtracts your overhead, and divides your total revenue to give you your net margin. This information is vital to make a profit. Do the research.
Target Practice
Do not ignore the market realities. It is the way that you will get the consumer to buy your products or services.
What you want to do for your business idea is half of the calculation for starting a business, and the market is the other.
The market is the target audience that determines the best preparations for buying and selling. Companies want to increase the chance that the consumer will buy from them and not their competition. Your business may not interest everyone, so identify your target audience.
Prepare Your Financial Plan
When writing the financial portion of your business plan, remember to include the income statements, the cash flow statements, and the balance sheets. You may have also heard them called:
- Profit and loss statements
- Revenue statements
- Financial performance statements
- Earnings statements
- Operating statements
Don’t let these titles confuse you. When putting together the financial portion of a business plan, don’t make the common mistake of misjudging expenses. Do the research and check your numbers.
Focus On Key Elements
Do you know what the key elements are for starting a new business and avoiding mistakes? Take your time and review each section of your business plan. There are a few do’s and don’ts that you need to be aware of when planning.
- Don’t over-hype your product – words like blazing and ultimate do not validate your product or service. Excite the consumer with your business ideas, not with verbs and adjectives you think they want to hear.
- Don’t give too much information – no one wants to read a novel for a business plan. Ten to twelve bullet points are what to look for; everything else is just filler.
- Do make sure to review – allow a few people to read your plan for flow, grammatical errors and spelling mistakes you failed to see. Some people will be immediately turned off to your ideas when they see you haven’t even got the basics right.
- Don’t be inconsistent – comparing multiple target markets or citing conflicting statistics is a sure fire way to confuse or mislead someone. Make sure your research is solid and clear.
With dedication, determination and a little hard work, you can reach your business goals. Just take it one step at a time and if you are ever in doubt, ask someone who has been there before and already built what you are trying to build.
Do It Yourself
Begin your market research. Track advertising costs, research consumer behavior, and explore the market trends and opportunities.
Market research is essential for every new business. Simply having a conversation with someone about your product or your particular market, right there you are conducting market research.
Identifying your target market using surveys or questionnaires is the best way to obtain feedback about your product or service.
Avoiding the Most Common Business Mistakes
If you want to hear all about business mistakes and how to avoid them, I encourage you to listen to my dad, Gene Guarino. Before his passing, he appeared on hundreds of podcasts sharing how people could avoid his failures and duplicate his successes.
Avoiding the mistakes listed above can help you build a successful business. A thorough business plan lets you know how your business will succeed.
As you move along, know that you can edit your project or add to your project. Writing your plan will set your goals in motion and make sure that you stay focused.
Be expected to know and show a realistic image of where your business is now and where it can be in 2 –3 years.
You want to know if your product can weather the competition. Do your due diligence for your success. And don’t forget to do the research.
