10 REASONS WHY BUSINESS PLANS DON’T WIN GRANTS IN NIGERIA
Often, your business plan is the first impression potential investors have of your company. Even if you have a wonderful product, team, and consumers, if you make any of these avoidable mistakes, it could be the last impression the investor has of you.
Even in this down market, investors see thousands of business plans each year. The business plan is the sole foundation they have for deciding whether or not to bring an entrepreneur to their offices for an initial meeting, aside from a recommendation from a reliable source.
Most investors simply focus on finding excuses to say no in the face of so many chances. They believe that entrepreneurs who know what they’re doing will avoid making critical errors. Every blunder you make counts against you.
This article will show you how to avoid the most typical business plan mistakes.
- Failing to relate to a true pain
My computer network keeps collapsing; my accounts receivable cycle is too long; existing treatments for a medical issue are useless; my tax returns are too difficult to complete are just a few examples of pain. Businesses and consumers pay a lot of money to get rid of the pain. You’re in business to make money by relieving misery.
In this context, pain is equated with market opportunity. The more prevalent the suffering, the higher your market potential, and the better your solution is at relieving the pain, the greater your market potential. In a well-written startup business plan, the solution is firmly embedded in the context of the problem to be solved.
- Value inflation
“Unparalleled in the business,” “unique and limited opportunity,” and “superb profits with minimum capital input” are all statements and exaggerations, according to the actual documentation.
Investors will make their own decisions based on these factors. Lay down the facts – the problem, your solution, the market size, how you’ll sell it, and how you’ll remain ahead of the competition.
- Trying to be all things to all people
Many young businesses assume that more is better. They describe how their product may be used in a variety of areas or create a sophisticated suite of items to introduce to a market. Most investors, especially for very early-stage startups, desire to see a more focused strategy: a single, superior product that addresses a difficult problem in a single, huge market and is marketed through a single, established distribution channel.
That isn’t to argue that other goods, applications, markets, or distribution methods should be ignored; rather, they should be leveraged to complement and enhance the core strategy’s narrow emphasis.
A powerful, engaging core thread must be used to tie the plot together. Determine this and make them supporting characters.
- No go-to-market strategy
Sales, marketing, and distribution strategies that aren’t explained in business plans are doomed.
The following are the most critical questions to address: who will buy it, why will they buy it, and, most importantly, how will you get it to them. You must detail how you have already piqued client interest, received pre-orders, or, better yet, produced actual sales – and how you will capitalize on this knowledge through a cost-effective go-to-market strategy.
- “We have no competition”
You have competitors, regardless of what you may believe. Perhaps not a direct competition in the sense of a firm providing the same service, but at the very least a substitute. A spoon can be replaced with fingers. E-mail can be replaced with first-class mail. An angioplasty can be replaced with a cardiac bypass. Simply put, competitors are those who are vying for the same client cash. Saying you have no competition is one of the quickest ways to get your proposal thrown out — investors will assume you don’t fully grasp your market.
Your business plan’s “Competition” section is your chance to highlight your relative advantages over direct competitors, indirect competitors, and substitutes. Aside from that, having rivals is a positive thing. It demonstrates to investors that there is a viable market.
- Too long
Investors are extremely busy people who do not have time to read lengthy company plans. They also choose entrepreneurs who can communicate the most crucial aspects of a difficult idea with a minimum of words.
A good executive summary should be no more than 1-3 pages long. A 20-30 page business plan is good (and most investors prefer the lower end of this range).
Remember, the main goal of a fund-raising business plan is to persuade an investor to pick up the phone and call you for a face-to-face meeting. It is not intended to go into great detail. Details should be recorded elsewhere, such as in your operations plan, R&D strategy, marketing plan, white papers, and so on.
- Too technical
Business plans, especially those written by people with scientific backgrounds, are sometimes overburdened with technical details and jargon. Initially, investors are only interested in your idea if it:
- Solves a significant problem that people are willing to pay for
- Is a substantial improvement above rival options
- Patents or other methods of protection may be used
- Can be implemented on a budget that is affordable
All of these questions can be answered without delving too deeply into the technical details of your product’s operation. During the due diligence procedure, professionals will examine the details. Keep the company plan as concise as possible. Separate white papers should be used to document the technical specifics.
- No risk analysis
The business of investing is balancing risks and benefits. Some of the first questions they ask are about the dangers that your company faces and what steps have been taken to manage those risks. The following are some of the most significant dangers associated with starting a business:
Will people actually buy what you have to sell? This is market risk. Will you need to make a significant shift in consumer behavior?
Can you deliver what you say you can in terms of technology? On-time and on a budget?
Operational risks: What could go wrong in the company’s day-to-day operations? What could possibly go wrong when it comes to production and customer service?
Risks in management: Will you be able to attract and retain the right people? Is your team capable of pulling this off? Are you willing to move aside if required and let someone else take over?
Is your intellectual property actually secured from legal risks? Are you infringing on the patents of another company? Can you restrict your obligation if your solution fails? Of course, this is only a partial list of dangers. Even if you believe the risks are minor, potential investors will not believe you until you show that you have given considerable attention to what could go wrong and take appropriate actions to manage these risks.
- Poorly organized
Your strategy should be well-thought-out and well-organized. Each section should build logically on the one before it, without requiring the reader to know anything about the plan that will be provided later.
Although there is no single “right” business plan structure, the following is one that has proven to be effective:
- Poor spelling and grammar
What does it say about the way you manage your business if you make dumb mistakes in your business plan? Use spellcheckers and grammar checkers, enlist the help of others to proofread the plan, and do whatever it takes to eliminate embarrassing errors.
- Too repetitive
All too often, a strategy repeats the same information. A well-written plan should only cover significant themes twice: once in the executive summary and again in the body of the plan, in greater depth.
- Appearance matters
An investor may have dozens, if not hundreds, of proposals waiting to be read at any given time. Make sure the cover is appealing, the binding is professional, the pages are well-organized, and the fonts are large enough to be readily read to rise to the top of the pile. On the other hand, don’t go too far; you don’t want to come across as a show-off with no substance.
- Waiting until too late
The process of capital formation takes a long time. In general, allow 6 to 12 months from the moment you begin developing the plan until the time the funds are received in the bank. Your management team should expect to devote approximately 500 hours to the plan. Consider outsourcing the development of the business plan if you are too busy building your product, company, or consumers (which is arguably a better use of your time).
- Failing to seek outside review
Before you send your strategy out, have at least a few individuals examine it — preferably people who are familiar with your market, sales and distribution tactics, the VC market, and so on.
You and your team may think your plan is flawless, but that’s mainly because you’ve been staring at it for months.
If you need a service of a Professional Business plan writer, then Dayo Adetiloye Business Hub is the place to go Call or WhatsApp us now on 081 0563 6015, 080 7635 9735 or send an email to firstname.lastname@example.org and we will solve any of your business plan problems.
Hope you enjoy this article?
Share your thoughts in the comment session.
Contact us today for your business consultancy and business advisory services. We can help you fine-tune your idea, structure your business, market your business, train your staff, consult on your retirement plan, coach you for financial success. We also write a business plan and help with fundraising strategies and Grant applications. We can help you start, grow, and expand your business.
Call or WhatsApp us now on 081 0563 6015, 080 7635 9735 or send an email to email@example.com and we will solve any of your business problems.
- 9 Common Housing Types in Nigeria with Estimated Building Cost - January 13, 2022
- “THE TOP DOG LEADER” “HAKEEM OLAOGUN DICKSON” - January 10, 2022
- TECH STARTUPS IN NIGERIA - January 10, 2022