The business plan is primordial for the success of any company out there. Every single aspiring entrepreneur needs to first work on the business plan and then expect success. The problem is that most business plans are flawed from the start. This can only lead to one outcome: failure.
You need to learn how to create a really good business plan. There are numerous articles about this on the internet. What we will focus on right now is highlighting some flaws that Julio Avael III sees as fatal. Avoid these at all costs.
The general idea that is used by many entrepreneurs is that they use themselves as the business’ ideal customer. This is usually smart as you fully understand service/product availability and value. However, this can create a huge business plan flaw as you are misinterpreting market size. You can also think that you are going to get a much larger traction than what is actually possible. Having unrealistic expectations can only lead to failure.
Lack Of Information
The best business plan includes a lot of information. Practically, in order to draft the best possible business plan you need to use as much information and data that you can put your hands on. Product needs have to be confirmed and a really good research has to be conducted. Always verify potential customer numbers. Also, understand what the buying process entitles. You want to understand what the best price is and where potential customers usually buy services or products like what you want to launch.
Because of the evolution of the internet there is this general belief that all that is needed to get access to customers is to have an online presence. This error is especially true when referring to online stores. For a business to be successful it needs access to customers. Without this it is impossible to make sales.
You can identify the best customers, figure out how their needs are satisfied by your products, what the best price is and still not generate sales as you do not gain access. Sometimes there is a need to get endorsement from a source that is trusted. In other cases you need more money that would be put into advertising. Always identify how customer access can be gained.
This fatal business plan error is really easy to make because of the fact that you naturally think you are going to generate many sales. Even if you do, you can still end up with cash-flow problems. The businesses always require start-up costs. When these are high, cash-flow might end up being drastically limited. A good business plan needs to take negative cash-flow into account and have a plan in place to deal with it.
No matter what you might think, creating a solid business plan is not easy. You want to be sure that yours is spotless. Sometimes, this means that you want to work with someone that has a lot more business experience than you. There is nothing wrong with asking for help.