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3 common mistakes to avoid in small business planning

Don Mercer
Posted by Don Mercer
Small Business Banking

I had an email conversation with a reporter, Emily Starbuck Crone, recently about the importance of business plans and common mistakes small businesses make when designing and implementing those plans.

Business woman holding tablet looking at notes on bulletin boardAfter Emily’s interesting post on these topics appeared, I realized I had a few additional thoughts to share. So, here are three additional pitfalls that are common among business owners:

* Jack of all trades, master of none: Trying to be all things to all people — customers, employees, vendors — can lead to mediocre performance. Just remember that while we may be good at a great many things, none of us is a master of everything. That is why it is important to surround yourself with trusted advisors — CPAs, attorneys, bankers, trade associations, etc. — and with employees who complement your talents and can help you grow your business.

* We never plan to fail, we just fail to plan: Many entrepreneurs fly by the seat of their pants as they attempt to keep “all the balls in the air.” Before they know it the day, week, month, or year is over, and they haven’t given a lot of thought to what they do well and where they want to take their business. Small business owners may want to set aside crucial time to think strategically about their business and come up with a SMART plan that they can manage to. This will help them set a clear vision for their company and make it easier to manage by objectives.

* Don’t sell yourself short. As I told Emily, many small business owners tend to focus on sales growth at all costs, attempt to differentiate themselves on price alone, and may not understand the underlying value of the service or product they provide. Remember, if you value the quality your company provides, then your customers may be willing to pay more for that quality. So don’t be too quick to discount your business’s worth. While your business may not be for everyone, those who recognize the value will pay for it and then spread the good word about you and your company.

Closely related to the topic of business plans is the question of whether you can get a business loan without a business plan. The short answer is yes. But let’s be realistic.

When you seek a loan, you are asking a bank to “invest” in you and your company. So, put yourself in the bank’s shoes: Would you prefer to lend to a company that has a sound business plan and an owner who can thoroughly articulate how the business executes on that plan, or a company that has no specific or clearly articulated plan? Businesses do themselves a big favor by having a well-defined business plan in place.

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