Chapter 9 – Common Mistakes to Avoid

From Business Plan Essentials: How to Write a Business Plan

Why Strong Ideas Still Get Rejected

Great concepts frequently underperform because the plan is inconsistent, vague, or poorly presented. Reviewers don’t reward enthusiasm—they reward evidence, logic, and internal consistency.

1) Inconsistency Across Sections

Big expansion claims in marketing but flat financials, or a hiring plan that payroll can’t support, are instant red flags. Cross-check that narrative, operations, and numbers tell the same story.

Fix: Build a “consistency pass” checklist—every claim must map to a line in the model or an exhibit in the appendix.

2) Unrealistic Assumptions & Inflated Projections

Overstated sales and understated costs break trust. Experienced reviewers spot optimism bias in seconds—especially in early ramp and gross margin.

Fix: Use conservative ramps, cite sources, and include a simple sensitivity (e.g., −10% sales, +10% COGS) showing plan resilience.

3) Vague, Non-Measurable Claims

Statements like “aggressive marketing” or “target everyone” signal weak strategy.

Fix: Replace with specific actions, timelines, budgets, and channels. Show how the funnel converts to revenue.

4) Overly Technical or Jargon-Heavy Writing

Dense language hides logic. Reviewers skim—clarity wins.

Fix: Use plain English, tight paragraphs, bullets, and supporting visuals (tables, charts) instead of long blocks of text.

5) Sloppy Formatting & Presentation

Inconsistent fonts, missing page numbers, unlabeled exhibits—these undercut professionalism.

Fix: Standardize headings, add a table of contents, number pages and exhibits, and include a dated document control footer.

6) Weak Financial Evidence

Models without assumptions, cash flow that doesn’t tie to operations, or missing schedules quickly disqualify plans.

Fix: Show drivers (units, pricing, conversion), build 3-statement links, reconcile working capital, and footnote assumptions with sources.

7) Ignoring Risk & Contingencies

Omitting risks reads as naive. Reviewers expect you to anticipate shocks and show practical mitigations.

Fix: List top 5 risks with mitigation steps and early warning indicators; include one downside scenario in the model.

8) No Proof in Appendices

Claims without documents reduce credibility—especially for lenders and immigration officers.

Fix: Curate quotes, draft leases, supplier emails, LOIs, licenses/permits path, resumes—cross-referenced from the narrative.

Red Flags vs. Strong Signals

Common Red Flags	What Reviewers Want Instead
“No competition” / “We’ll capture 5% of a giant market”	Competitor map, real differentiators, testable wedge, early customer validation
Hockey-stick revenue with flat OPEX	Capacity-linked OPEX, hiring calendar, ramp logic connected to operations
Unexplained price/margin superiority	Driver-based margin plan (mix, learning curve, supplier terms) with risks
Cash flow positive but negative bank balance	Integrated cash flow with working capital and opening cash reconciled
Appendices missing or unlabeled	Indexed appendices, referenced in-text (e.g., “See Appx B-3”)

Pre-Submission QA Checklist

Executive Summary mirrors the audience’s top concerns (bank, investor, immigration).
Narrative ↔ Financials ↔ Operations are aligned; every claim has a source or exhibit.
Financial model links 3 statements; scenarios show downside resilience.
Formatting: consistent headings, page and exhibit numbering, dated footer.
Appendices curated: quotes, terms, permits path, LOIs, resumes, policies.

Download the Mistakes-to-Fix Checklist

A one-page QA you can use before every submission.

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Common Mistakes to Avoid