Competitive Analysis and Forecast Faux Pas

We receive several business plans each week drafted by others, including business owners/entrepreneurs and so-called experts, often falling into the trap created by faulty templates and software when Googling “business plans.” The first major issue that arises almost all the time is insufficient market and competitive analysis, critical to supporting the business plan let alone revenue assumptions. Forecasts very often do not include a month-to-month worksheet to better establish a true break even point and virtually never include the type of detailed Notes and Assumptions that allow the reader to easily understand versus letting them assume that these assumptions have been pulled out of thin air. In speaking with bankers, SBA officials and private investors, these items doom business plan submissions most often. The other item that commonly creates issues is the lack of a true Executive Summary versus an Introduction only within a business plan disguised as an Executive Summary. The Executive Summary gets you in the door for submittal of a complete business plan.

For many business plans with a national marketing focus or web site based, we often suggest completing the market analysis first since a strong market analysis sets the table for appropriate forecast assumptions and therefor a viable business plan. In addition, we are often asked to complete forecasts or budgets for existing companies since our detailed and easy to use and manipulate worksheets are so well received by lenders.

As a reminder, we can help with developing business plans or operations and offer a free consult. Contact us at tim@thebusinessplanconsultants.com.