Why do some business plans fail?
Understanding Why Some Business Plans Fail
The cold reality is that no one is going to read the plan with the intensity you had when you prepared it. So knowing this, most entrepreneurs focus on just getting the plan done rather than on getting the right plan done. But what is the perfect plan?
As Carl Jung pointed out in Modern Man in Search of a Soul, “The shoe that fits one person pinches another; there is no recipe for living that suits all cases.” Obviously he did not have entrepreneurship in mind when he wrote it, but his observation is appropriate. We know that our advice is not the perfect fit for everybody, and not everybody is going to create the perfect business plan.
Simply remember this, that the probability of your success is directly related to the extent that your business plan is accurate and complete. So it is never a good idea to make your reader wade through typos, balance sheets that do not balance, upside-down slides, or “other troubling signs of inattention to detail.”
Also stay away from getting into the spinning “teacup and saucer ride” we see at amusement parks. This is when investors continually have you revise your plan until it becomes spun too far from your true strategic vision.
And do not assume that business planning software relieves you of having to think hard about how you intend to execute your idea and can sabotage your credibility.
Finally, as William A. Sahlman, professor of entrepreneurship at Harvard Business School, says, “All opportunities have promise; all have vulnerabilities. A good business plan doesn’t whitewash the latter. Rather, it proves that the entrepreneurial team know the good, the bad, and the ugly that the venture faces ahead.”