What are the common mistakes people make when writing their business plan?

Probably one of the most common things is having a business plan that isn't authentic, that doesn't really reflect you personally. It's got to reflect the thoughts of the person and it's got to be realistic. It should be concise and focused. It doesn't need to be a very long plan unless you are looking for millions of dollars from venture capital.

The numbers, the assumptions all have to be realistic. That's very, very important. Do the research. Research selling prices and competition. If you are going to take a lease do some research you and call real estate people find out what this space sells for or leases for. Get real numbers. Just something as simple as setting up a business can throw your plan off whack. People are surprised that business telephone service is much more expensive than residential. Find out what it is. Do your homework.

Every assumption should have some documentation or realism behind it. If you make big mistakes, you are going to lose money. All the financial projections and forecasts may not seem real when you are writing out the business plan, but once you get into business, you are dealing with your own real money. So you want to be careful with it.

It's a full-time job going in to business. Another thing people sometimes fail to consider is how they are going to live until the business becomes profitable. Make sure you have enough money personally to live for six months or for a year till your business produces enough money for you to live on. Some people start business part-time and go on to full-time when it starts to make some money, but you have to have a way to support yourself and a way to live. In general most businesses will not be profitable when they first start out. It takes a while. So you need to know not only how the business is going to do, but how personally are going to support yourself until your business is able to support you.

That's why you do business planning. You do your realistic financial projections and cash flow projections to see when the business is expected to start producing enough money for to live on. That's very important to you know, because that's how you can tell whether you have enough to succeed, to support yourself. The worst thing is to have your business just beginning to take off, but you are out of money so you have to abandon the business to get a job. So you have to have a way to live - whether you have a spouse who is working, whether you keep your job and start the business part time slowly until it takes off