Entrepreneurs in Colorado and around the country are often reminded of the importance of planning and the high failure rate of fledgling commercial ventures, but these prudent words of caution sometimes go unheard. Companies with an effective plan in place may find it easier to secure much needed capital and could be better prepared to cope with the peaks and troughs of an uncertain marketplace, but business owners should avoid a number of common pitfalls as they develop their plans.
Many new businesses run into difficulties when customers are slow to pay their invoices. While business plans should focus primarily on profitability, cash flow should not be ignored. Business plans should also be specific and achievable. A comprehensive and grounded business plan can motivate entrepreneurs, make them more resilient and build their confidence, but plans with vague or unrealistic goals could sap their reserves of enthusiasm and foster defeatism.
Successful owners usually take care of urgent and pressing matters right away, and business plans should encourage decisive action and establish priorities clearly. Entrepreneurs sometimes become enamored with the main focus of their commercial ventures or their unique selling propositions, but they may be left unprepared if their plans do not include a range of contingency options. However, the biggest planning pitfall is not spending enough time doing vital research, organizing thoughts and refining strategies.
Addressing legal matters is an important part of the business planning process. Attorneys with business law experience may be able to assist entrepreneurs with regulatory matters such as obtaining permits or licenses and help to ensure that a new venture’s intellectual property is properly protected against potential infringement.