If you are preparing to raise capital from either an investor or a bank, you’re probably writing a business plan. Here are five of the most common mistakes that I have seen as a result of my experience as a corporate-finance consultant:

Submitting the Plan to the Wrong PeopleI have actually heard entrepreneurs say, “I don’t know why I can’t raise any money. I’ve sent my business plan to hundreds of people!” Don’t make this same mistake.

You should first determine that your prospective investor or lender has an interest in your industry and your business. Do this by making a call or sending an introductory letter or e-mail. If you can receive a referral from an accountant, attorney, or banker, that is all the better.

Never, under any circumstances, should you send an unsolicited business plan. These are put at the bottom of the pile, and they are seldom read or given serious consideration. If you determine that your prospect has an interest, send over only the executive summary for review, unless otherwise requested.

Incomplete Executive SummaryThe first thing that all prospective investors and lenders will want to read is your executive summary. This section should be no more than two pages, but three is the absolute maximum. When you write your business plan, the executive summary should be prepared last. (After all, how can you summarize something that has not yet been written?)

The summary should be broken down into five sections, each of which should be no more than one or two paragraphs long. These five sections are:

• The Opportunity: Describe the need that is currently unfilled in the marketplace; if the need is being filled, discuss how it is not being adequately met.
• The Solution: Describe your solution to the problem, and why it is better than what is currently available.
• Management: Describe why you and your team are qualified to deliver the solution that you have proposed.
• Market Size and Share Expectations: Describe how large the market is for your solution, and discuss how much of that market you intend to capture.
• Financing Need and Exit Strategy: Describe how much money you need and what it will be used for, but close with how you intend to provide the investor with an exit strategy.

Weak Management

Either agree to hire full-time executives or bring skilled directors onto the board. If you are searching for funding from angel investors, you might offer executive management positions to those investors who have significant experience in the industry. Venture capitalists, on the other hand, are not likely to invest until the management team is complete.

Unreasonable Financial ProjectionsAll lenders and investors are accustomed to seeing financial projections that go in only one direction — up!

While every business owner and entrepreneur has the best of intentions when preparing a forecast for the next five years, it is seldom realistic to assume that sales will grow by 50-100% each and every year.

It is also not likely that gross and operating profit margins will improve forever.

Your assumptions with respect to working capital turnover, earnings retention, debt/equity mix, and return on invested capital must all be reasonable. If you forecast that your business will return 100% or more on its invested capital during each of the next five years, you are going to have some explaining to do. That does not mean that it is not possible, just that it’s not probable. (See this article on developing solid financial projections [http://www.growthcurveservices.com/articles/persuasive-projections.html].)

Greed!Nothing will ruin a deal faster than greed. If your business is little more than an idea at this point, it is not feasible to value the company at millions of dollars. If your plan is to raise $2 million in exchange for 10% of the business (i.e., a $20 million valuation), you are going to have a tough time attracting the interest of venture capitalists and angel investors.

Spend less time worrying about the valuation today, and instead focus on structuring the transaction so that you can re-acquire a majority ownership interest in the future.

Moreover, don’t be too quick to equate majority ownership with control. You might be able to sell non-voting stock that does not give away control of the business.

Take steps to ensure that you’ve thought about these five points before you submit your business plan, and you’ll almost certainly be a step ahead of others who are competing for funding or financing.

One of the sections that all investors will read first is the discussion on management. If you do not have direct, significant experience in the industry in which you’re trying to start your business, add someone to the management team who makes up for your weakness.

An increasing number of women are starting small businesses.

The number of small businesses that are starting up with women at the helm is growing and 30% of business owners in the UK are women (Labour Force Survey 2003). The reasons women decide to start their own business vary, with most reporting that they want to be their own boss, choose their working hours and enjoy better work life balance.

However for many of these women the reality of running a small business does not live up to their expectations; it is difficult to fulfill their dreams for their business and they become disillusioned and overwhelmed with the ongoing struggle of running a small business alongside their other roles in life – mother, partner, friend, daughter, chef, chauffeur, socialite – the list goes on!

One area that has been identified as a significant factor limiting the success of women in business is a lack of business planning.

Many women entrepreneurs and small business owners fail to set aside the time to develop (and regularly re-visit) their business vision and strategy. As the old quote goes, ‘if you fail to plan, you plan to fail’. It is generally agreed that if you want your small business to succeed, you have a much greater chance if you have a clear vision and an action plan for bringing that vision about.

So what stops women who are starting a small business from developing an inspired and effective business plan?

After all, we know that we should have a business plan but despite the best of intentions to succeed in our business, many of us don’t! Why is this? What is it that stops us sitting down and writing a clear plan and strategy for our business, especially when we know that we are more likely to succeed if we do it?

We believe it is partly because writing a business plan is boring! Let’s face it, it feels like a chore so we don’t do it. We may get the resources together that we need, we may even get part of the way through writing it, but it is the rare few that actually complete a comprehensive business plan outlining a clear vision, strategy and action plan for their business. Often, we are chomping at the bit to get our product or service out into the world and figure we can simply skip the boring planning bit altogether right? We can certainly relate to this feeling because we struggled with business planning in the early days – we gave it a try but never seemed to get further than a few pages in!

It is our view that traditional models of business planning do not cater for women in business!

We believe that traditional models of business planning and strategizing don’t recognise that women in business have a life outside of work – that they have a partner, friends and family to think about and are not prepared to compromise on health and relationships to have a successful and profitable business. Women today want the best of both worlds; we think it is possible and that they deserve to have it!

Conventional business planning and management approaches are grounded in the belief that work and personal life should be kept separate, a task impossible for most women today. This makes it very difficult for them to create and sustain a business that acknowledges their business ambition AND empowers them to bring about great relationships and a healthy and balanced lifestyle for themselves and their loved ones.

So how can business planning be tailored to meet the needs of women in business?

Whether you are starting out in business or you are well-established, we encourage you to prioritise business planning in order to ensure a strategic approach to business growth and success.

• Set aside the time and space to make this happen in your business now.
• Acknowledge that traditional models of business planning may be a great starting point, but that they may not address your needs as a business woman who also values health, relationships and having a life outside of work.
• Think outside the square and discover ways to plan your business that relieve stress rather than increase it. Look for tools that empower you to bring all aspects of yourself to the planning process – personal and professional – because the reality is that for women in business the two are intertwined and to be successful in one you must pay attention and care for the other!
• Get creative in your approach – both to the process of business planning and also to the way you can incorporate the other aspects of your life into your successful business strategy.
• Take action to implement your strategy so that it comes to life for you.
• Commit to re-visiting with your business plan on an ongoing basis to ensure.

Business planning is vital to the success of your business, and can also encompass all the aspects of your life.

You do not have to sacrifice your health and relationships to be a successful business owner and entrepreneur. Take action now and plan for your success in business and in life.

Here is a simple overview of a planning hierarchy: The business plan is the master document that directs all aspects of an enterprise. Yet, many executives fail to fully understand its importance for achieving goals. Too often, the plan is written then filed away and never used as a key tool in managing a business. A good plan is not necessarily about how well it is written – more important is how well it is implemented. Someone once said, “A partial plan implemented well is better than a well written plan never placed into action”. It is very important to use the plan as your guide, but it must also be dynamic under constant revision because the marketplace is not static. Without a plan, how do you know where you are going and how you will reach your destination?

A business plan addresses functions related to product, marketing, operations, administration, finance, legal, and budgeting. Yes, you can argue that more goes into the plan – remember this is just a simple summary. Planning is like preparing for a road trip. You know where you are and know where you want to go, but how do you get there?

Let’s say your trip is several hundred miles long. Studying your map, you ask yourself questions about time and resources needed before you start the journey. You want to get to your destination as quickly and efficiently as possible, but at the lowest cost without sacrificing essentials or your comfort.

Factors to consider for your trip include mode of transportation, cost, length of trip, and best route in a realistic amount of time. What happens during the trip, if you encounter road construction, traffic jams, or even detours? What if your car breaks down along the way? You tried to plan properly in advance, but now you’re faced with unexpected choices. What resources do have at your disposal? How do you tap resources you don’t have now? What are the opportunity-cost to consider? Which options make most sense to keep you moving on?

Planning your road trip, you consider all the route options. Route A is the shortest, but research shows the route is full of road construction. Taking this route will make your journey longer because of delays and it may cost more in gas money because poor mileage efficiency caused by many stop and go driving. Route B is significantly longer meaning it takes more time to reach your destination. However, there are no detours or construction to deal with. You can zip all the way with minimal stops and find the improved mileage efficiency means less gas station stops resulting in cost savings.

These are the kind of factors requiring consideration when starting a plan. After you decide on the route to take, you must now consider your available resources and their capacity to fulfill your goal. In our road trip example, your next considerations will be influenced by a systems check of your automobile – is it road worthy for a long trip? Must you invest in new tires? Is your battery reliable? You get the idea. How much money do you have allocated for gas, food, and the unexpected? Are you doing all the driving and navigation yourself? When do you start your trip after considering your options?

Being realistic with your goals and anticipating roadblocks will assist you in starting your plan. Don’t waste time constantly refining your plan at the start or you will never reach your destination. Just start with the basic elements using research and a little common sense. Risk is part of the game, but you can significantly reduce future risk if you plan, learn, evaluate, and adjust. Adjustments are always necessary because the market is dynamic – so should be the application of your plan. You cannot anticipate every obstacle, but you will be better prepared to resolve issues if you have a plan and evaluate it on a regular basis.