Planning the Business Plan
We at Gridalogy are also working on our business plan. The plan has been a work under constant progress for many months now.
It has helped us to define all internal and external elements involved with starting and running our venture. More often than not it is a combination of marketing, financial, manufacturing and human resources plan. It becomes a road map or game plan for the company. Investors, suppliers and even customers often ask for a business plan. In Gridalogy’s case, we are actively pursuing capital investments.
Since the business plan contains many important business ideas and operation plans, steps must be taken to insure that the plans remain safe. If the business plan is being reviewed by a friend, it’s a good idea to have them sign confidentiality and no-compete agreements.
The material that goes inside a business plan can be found on templates provided by many different websites and also from drones of book available in the market.
We have made many mistakes on our way and have learned from them as well. After referring to many sources and recommendation provided by well wishers and business plan experts, these are the classic mistakes we made.
- Avoid all hokey forecasts: All sudden jumps in sales forecasts should be avoided. It is very difficult for anyone to believe that as soon some investor pours some capital in, the sales will go through the roof.
- Unrealistic Payroll: The founders of the company should account for their salary in the company. If they are being paid in the form of company equity, then the equity amount should be quantified as well.
- Too much Technology: Too much technology can hurt the business plan as well as risk the idea being stolen. Technology is great and some technical information should be added. However, it can also be overdone.
- Relying too much on Patents: Patents do protect original ideas but the plan should also include other ways to protect their technology.
- Buried Information: A business plan should be like a resume. The VCs or anyone else reading the plan should be able to get the upfront. If he/ she is looking for information then it should be easy to find the correct information as well.
- Numbers without Charts: Charts are worth a thousand numbers. They make comprehension of the numbers much easier. Use them as much as possible.
- Astronomical Profits: This goes along with hokey forecasts. Do not make astronomical assumptions about profits in the company.
- Underestimating Competition: Never underestimate competition. If the idea is new, someone else will catch on as well. How do you plan to deal with current and future competition?
- Naïve Cashflow: The cashflow situation needs to be clarified. Never underestimate the amount of money you will need to make the operation big.
Content is still king in a business plan. The format is good but not of supreme importance. Moreover, the entrepreneur or whoever is preparing the plan should have a clear picture about the venture themselves.
Entrepreneurs usually have the entire picture and the plan mapped out in their minds. However, sometimes communication becomes the bottleneck. A successful entrepreneurs will need to overcome these shortcomings.