Why do you need a business plan?

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Writing a winning business plan is necessary whether you need outside investors or not. The process of writing a winning plan forces you to invest significant time and energy into thinking about your business and doing your homework.

As you begin formulating your business plan, be wary of some of the common traps new entrepreneurs fall into:

Failing to plan is planning to fail

Effective planning means more than writing goals on a piece of paper. It means taking personal responsibility to prepare you emotionally and practically to be a business owner. Unrealistic assumptions and poorly written plans communicate a lack of preparation to investors.

Plan your Exit - Do you want a Business or a Job?

Many novice entrepreneurs create businesses that become their jobs rather provide the freedom and passive income they dreamed of. As a result of poor planning, many new businesses generate little or no cash flow and require the full time effort of the owner. If your dream is to have both or personal and financial freedom, plan to build a business that can at some point run itself and provide excessive cash flow. Recognize that it often takes many years of blood, sweat and tears to get to that point.

Many Novices want to "Do it their way"

By failing to educate themselves in the basics of operating a business, new entrepreneurs faill to surround themselves with a competent team of employees, advisors and mentors. They are solo players instead of team players.

A winning Business plan is not an Academic exercise

Many businesses fail despite having beautifully written plans complete with optimistic projections. A business plan is not a school term paper. Yes, to get your plan read it needs to be virtually perfect in appearance, format, layout and grammar. Unfortunately, in the real world, earning an "A" in appearance and forgetting to emphasize the thought and substance of a plan often results in an "F" in the area that matters most - a business with excessive cash that serves a purpose greater than money.

I have the best Product!

The world is full of great products and short of great entrepreneurs. Successful businesses require great people first, great systems second and great products third. Think about companies like Microsoft (Bill Gates), Dell Computer (Michael Dell), and McDonald's (Ray Kroc). Their success is a result of the passion of their entrepreneurs and the uniqueness of the business systems they created. In many cases widely successful companies have products that are high quality but not the best in the market. They achieve their growth because they have superior people and business systems with sustainable and uniques advantages.

Business Tips

• A great product doesn't make a business successful. Great people make a business successful.

• The problem with being a solo player is that you are an individual competing against a team.

• If you are the smartest person in your team, your team is in trouble.

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All images used are sourced from Pixabay.