In my Hub called Basic Business Plan for Small Business, several key pointers were discussed to give you an overview of what business plan is all about. This time, I'm taking the less favorable side of the business planning by presenting the most common mistakes made my numerous starting and even experienced entrepreneurs.

Why discuss mistakes? In the words of the former United States' First Lady Anna Eleanor Roosevelt, "Learn from the mistakes of others. You can't live long enough to make them all yourself."

Learning by experience is no longer acceptable given our limited financial resources and precious time. It is time to think smart, work less, and enjoy our business ventures to the fullest. I have searched the net to find the most common mistakes so you can easily review your business plan after reading this hub.

Here we go:

Incomplete Information

Admit it, writing a business plan might be boring for many passionate, always on the go, and always charged entrepreneurs. The tendency is to rush this process by including only available information and not doing enough research to confirm your ideas and opinion. Without enough information you will never gain the trust of lending institutions and venture capital firms.

Read again my Basic Business Plan hub to refresh your memory with regard to relevant information needed. Ideally, you must have well-studied data about your target customers, competitors, market trends, marketing plans, strategic direction, products or services, and operations plan. Make sure your market trends and competitor information are up to date to help you craft effective business strategies.

The bottom line of every business is profit. So make sure your sales forecasts and other profitability projections are very truthful and precise. Ideally, you should have at least projections for three years.

You need not include these data in your business plan but you must learn all these portions to answer questions intelligently and support any statements you claim.

Information Overload

This is the exact opposite of the first blunder - putting more information than needed. It may be due to fear or insecurity that we tend to write more than necessary. We feel a simple explanation will not suffice to please our audience. It also shows our lack of organization and incompetence to highlight important aspects of your business.

To quote from Mark Twain, "I didn't have time to write a short letter, so I wrote a long one instead." This is ironic but very relevant event in this digital world.

Check if you are writing too much technical details in your business plan. Most IT companies belabor on the technical superiority of their products instead of pointing out the benefits to the customers. It's like saying "I'm drowning here and you are describing the water!"

Better yet, ask some family members or friends to read your business plan and see if they can capture what you really want to say. If not then go back to the drawing board, identify the clutter, and edit your business plan.

Use the Appendix section in case you still feel the urge to include these technical details. In that way you can let the readers focus on the more important factors.

No Definite Timetable

Your business plan is the roadmap for investors and lending institutions. You should clearly communicate where you are going and when you can get there. Sometimes we are too busy discussing what will do to make the business succeed that we forget how much time we need to complete all these things.

Learn to set milestones, present definite timetable, and how you can get from one milestone to another. Highlight all important milestones. For instance, you can commit a timetable to finish the beta phase of your IT project in 6 months and will go public after 1 month. Or you can say that you will expand the business to other cities and states once you have 1,000 customers in your current location. Then support this milestone by explaining how you are going to accomplish these tasks.

Crucial timetable is the exit strategy. Investors and bankers like to know when you will consider your small business venture a success. After 3 years? 6 years? Be specific and realistic on your commitments for the interest rates are based on the numbers you are presenting to them.

Vague Executive Summary

Venture capitalists and other business investors are bombarded with thousands of business plans coming with many startup companies as well as expanding businesses. Keep this in my mind when you write your business plan. It means they do not want too much information, lengthy discussions, and 50-page report.

This is precisely the reason why so many of them read only the Executive Summary page and refer to different pages for additional information. Now you know why you should make this page very interesting to these people.

If you have a proprietary technology or any confidential information you do not want to share during the initial stages, you can simply write an executive summary to promote this new technology and how it will alter the current market conditions. If they still want to explore the potential of your business, you can ask them to sign a confidentiality or secrecy agreement. This will protect you from any infringement or copying of your breakthrough technology.

There are other fatal business blunders which will be discussed in the second part of this hub! Click here.