Good business planning is crucial to every business, no matter where it is located. A solid business plan is a roadmap that ensures you are treading on the path to success, whether you run a fashion business in Nigeria or a food business in Ghana. Unfortunately, running a business exposes you to risks that can jeopardise your success and even the survival of your business.
Some of the most common business plan mistakes occur as an oversight on the part of the entrepreneur. Others reflect the growing need for planning as a tool for steering business, management, and teams. But they are all common pitfalls that must be avoided at all costs.
A business plan, when done right, is a powerful tool for decisions, fast changes in operations, managing risks, and optimising management and teams.
So what are these common business plan mistakes? Let’s find out!
Common mistakes to avoid when writing a business plan for your business in Africa
Some common business plan mistakes that many entrepreneurs make that hinder the effectiveness of their business plans include the following:
Not Planning
Many business owners, especially in Africa, think business plans are only for seeking funding from investors or business loans from the bank so until an investor asks for their business plan, there is no plan.
This practice needs to be corrected. As a business owner, you shouldn’t wait for investors to ask you before you start writing a business plan. You should dedicate some time to creating a plan, either on your own or seeking assistance from a business consultant. A well-written plan helps you avoid wasting money and time by preventing you from constantly guessing your next move or treading a path that won’t yield good results.
One of the worst mistakes an entrepreneur can make while doing business is not planning months or even years ahead of their business. Don’t make that mistake—write a business plan.
Read more on internal business planning.
Using a static plan throughout your business’s lifespan
Business plans are not static. They are not documents that are meant to stay on one’s shelf, just gathering dust. A business plan is a document that requires frequent updates and revisions, meaning that once every quarter or so, you need to pick it up and brush it.
Using a static business plan robs you of several benefits that a business planning process offers. Your plans can change. Your assumptions may not hold anymore. And your plan will need to be revised to be able to stay on track.
A business plan is ever-changing. Planning for your business never ends—it only ends when the business is done. Keep your business plan current.
Lack of Research
Many businesses fail to perform sufficient market research or understand their target audience. And when that fails, sales suffer. Your target audience is the same people who will turn into customers, therefore, understanding them helps you write an accurate marketing plan based on them.
Thoroughly research your industry, market trends, and competition to make informed decisions. Without a solid understanding of your industry and target audience, you’re navigating blindfolded. Conduct extensive market research to uncover insights to guide your business strategy and decision-making.
Unrealistic Objectives
Setting vague or unrealistic goals and objectives can sometimes make you and your team feel like no work is actually being done. It takes time to build a recognisable business. And it will be a bit unrealistic to expect to be the best in your field of business in a year or even two but that isn’t to tear you away from working hard to get to the top. Set achievable targets bounded by realistic timeframes.
Clearly define specific, measurable, achievable, relevant, and time-bound (SMART) objectives and goals. This approach not only sharpens your focus but also provides a tangible framework to measure your progress and success.
Overlooking the Competition
Ignoring or underestimating competitors is one of the worst mistakes you can make in writing your business plan because, whether you like it or not, they exist and influence your sales and success to some extent.
It is therefore important to conduct a competitive analysis to identify strengths, weaknesses, opportunities, and threats. Understanding your competitors’ moves allows you to navigate challenges and capitalise on the gaps in the market.
Neglecting the Financials
Inadequate financial projections or ignoring the financial aspect altogether can cost you a great deal. Your business runs on cash, which means your cash flow should be adequately planned out. Develop realistic financial forecasts, including income statements, balance sheets, and cash flow statements.
Finances are the fuel for your business engine. Inadequate financial planning is like attempting a road trip with an empty tank. Develop realistic financial projections to ensure you have the resources needed to reach your destination. Include a cash flow table in your plan—you simply cannot ignore this.
Inconsistency and Lack of Cohesion
Having inconsistencies between different sections of the business plan causes confusion among your team. Your plan should work towards achieving specific goals and you cannot get there when you have inconsistencies all over the plan. Ensure that all sections of the plan align and present a cohesive and unified vision. A unified plan communicates a clear direction to stakeholders, instilling confidence in your journey.
Assuming a one-size-fits-all
Not every business plan is the same. You must adapt your plan to its true business purpose or goal if you hope to succeed.
There are several types and forms of business plans and all serve different purposes. Business A’s current business plan might be a lean business plan to test a new business idea, while Business B’s current plan might be a detailed action plan to achieve its goals or a startup business plan. Some businesses need different business plans at every stage of their business, which is why plans are never static and one size never fits all. It is also why we don’t believe in using templates to write business plans.
Develop a bespoke plan that best suits your business goals and use that to work towards achieving them.
Read more on the types of business plans.
Having diluted priorities
Whatever your priorities may be, you need focus. When priorities are divided, attention is also divided, which will only impede your ability to move forward. Starting with a priority list of three to four items helps you concentrate all your focus on those few priorities. A priority list with many items is almost never strategic and rarely effective. It is more strategic to focus on two to three priorities, achieve them, and then move on to the next three than to focus on ten things and never get anything done.
Failing to adapt or remain flexible
Having a business plan doesn’t put you in a tight corner—it’s actually far from that. A business plan is your guide and roadmap but that shouldn’t mean you can’t take a detour when the need arises or move any slower than you planned.
There are plenty of cases where your initial plan is ill-informed, missing steps, or just ineffective. In a case where it’s missing steps, you need to introduce those steps, which can affect the pace of your operations or sometimes bring them to a halt.
Having a business plan is about being able to make the right changes quickly so you can get back on track.
To sum up, writing a strong business plan is similar to getting ready for an exciting road trip. By avoiding these common pitfalls and navigating with purpose, you set the stage for a rewarding journey towards business success in any part of Africa.
Have trouble writing your business plan? Get in touch with us, we can help!
