Starting a business entails some preliminary things in which a business plan happens to be one of the vital things to do at the preliminary stage.
Hi everyone my name is Timileyin and in this post, i will be showing to you 6 mistakes to avoid when writing your business plan. In this post, i will be using the restaurant as my case study.
If you are indeed firm about opening a restaurant and making it your daily source of income, then you need to actually come up with a formal and accurate business plan to pitch to investors, banks or any other financial institution.
To be very honest, writing a business plan isn’t one of the palatable things to do because of the time, effort, stress that is put into it to get it right but since owning a business such as a restaurant is your goal, then you have no choice than to sit down and write it.
There was a scientific study on businesses that had plans and those that didn’t, the results showed that businesses with business plans happened to grow faster than those without a business plan but if achieving faster growth for your business means that you seek funding from angel investors, banks and so on then you actually will need a formal business plan.
If you feel that you don’t want to go through banks or angel investors and the likes to grow your business, there’s an alternative for you and that is you coming up with a strategic lean plan for your business.
Since the case study for this post is restaurants, a research was carried out to show the failure rates of restaurants within the first year and third year of starting out and the results show that 26% of restaurants fail within one year and 60% fail within the first 3 years. This statistics shows that to keep your restaurant business up and running for a very long time you need to set a clear vision for your business by coming up with a business plan.
One thing to consider is that while writing your business plan, there are chances of you making mistakes especially if it’s your first time writing one, due to this reason i have decided to come up with 6 potential mistakes to avoid while writing your business plan.
The first is
TAKING IT CASUALLY BY PUTTING MINIMAL EFFORT
Do you remember those days when you were told to write an essay and you probably just wrote it casually, well a business plan isn’t like that , it’s a more serious kind of write up which makes it vital for you to be more serious about it.
I call this point a mistake because if your business plan is taken casually, investors can notice it with just a glance through it or when they listen to your pitch. You obviously know what the result will be, well in case you don’t know, the investor will most often than not reject your business plan and will not invest in your business which will also affect the growth of your business negatively.
To really prove to your investor that you did a great job on your business plan, you need to find quality information, i mean information on your competitors, market type. You also need to be able to envisage the success level of your restaurant at a certain period of time after launching. This gives the investor a bit of faith and keeps the investor interested in your business.
The second is
MAKING YOUR WRITE UP TOO DULL AND DRY
The investors reading your business plan don’t have all the time in the world, they are also very busy individuals, so while making your business plan, don’t make it boring and dull.
Some of the tips to make your business plan pleasing to the eyes includes :
- Stating your restaurant leadership team
- Putting your restaurant’s designed logo
- Putting a draft of the menu you intend to serve
- Maps to show your location compared to your competitors
- Charts and designs to show your investors numbers in a visual way
One brilliant thing to do while writing your business plan is to put all the important details upfront so that the potential investor can read it before he or she starts skipping because the truth of the matter is that most of those investors out there don’t have the time to read every word of your business plan.
The third is
What most investors ask business owners many at times is “why must i invest in your business and not another business? ” or “what do i get to lose by not investing in your business?”.
This questions pops up most of the time because the investor doesn’t know why he had to invest in a business and not in it’s competitor.
While writing your business plan you need to state what your competitive advantages are, you need to make known to your investors what makes you special or unique from the other businesses in your niche.
You just don’t have to tell them -your investors why your business is different, you also need to carry them along through the process of ensuring that that difference is achieved practically.
The fourth is
FLOPPING AT YOUR EXECUTIVE SUMMARY
This section alone is as important as the whole write up in it’s self. This section should contain your mission, vision, competitive advantage, key facts about your business.
Most investors only read this portion of your business plan and that’s all so you only get one shot at this. Just take your time and do it like your life depends on it which it does.
The fifth is
UNDERMINING THE POWER OF MARKETING
When writing your business plan, don’t just be casual about how you will make the public to be aware of your product like saying you will promote it by using social media and all. You need to show the investors the nitty gritty of how you intend on making the potential users of your business- restaurant be aware of your business and also value your importance by carefully showing them your competitive advantage and making it clear to them while doing so.
While doing this, you also need to answer some vital questions about how you intend to carry out your marketing plans.
Some of these questions are :
- Will you be administering customer loyalty programs?
- How do you intend to sponsor community events ?
- Which company will you be working with as regards your marketing ?
- What are your plans about having a website for your restaurant?
- Do you intend on doing delivery service or not?
The questions are actually limitless so you just need to be evolving as marketing is concerned, keep yourself abreast of new tactics, new ideas to make your restaurant better off your competitors so as to gain more leverage over them.
The sixth is
PUTTING INSANE FIGURES FOR YOUR SALES AND EXPENSES
If you want to put an investor off, one of the things to do is to put values that doesn’t make any financial and logical meaning to your sales, expenses, profit margin and the likes.
Virtually all investors wants to know the financial status of your business and also wants to know how much it will cost for your business to scale up.
When you are at this stage, you just need to calm down and accurately project what your sales and expenses will be and also a envisage what your restaurant can achieve in a couple of years say maybe 3 years or five years.
While giving those figures, you should also state the actions you intend on taking to make that come true.
I’m sure that you now know the things to avoid while writing your business plan.
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