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What Are the Most Common Mistakes in Business Plans?

Ray Latif

For start-up and early-stage companies alike, business plans are the foundation for new financing and investment. Certainly, many entrepreneurs will come to the funding table with passion and a good idea, yet investors want to see how they plan to execute. Seasoned investors will also be able to spot holes and potential problems for a company down the line, and it’s critical to avoid common mistakes that could kill a deal in the first minute.

We sat down with Jack Brennan, managing partner of consumer products advisory firm
GBS Growth Partners, who offered some specifics on what entrepreneurs need to be wary of when crafting a business plan.

“First and foremost, if a business plan is too long, it’s going to lose the investor right off the bat,” Brennan said.

Brennan noted specifics required for the executive summary and body of a business plan, including an adequate timeline for sales projections and what investors want to see when it comes to staffing needs. Most important for investors, however, is how entrepreneurs detail elements of product differentiation and cash flow.

“If we’re analyzing a business plan, number one, is the product differentiated?” Brennan said. “Number two, does the cash flow make sense? So many companies will be out of business in six months because they don’t know how to manage inventories. So that’s a big piece right there.”

Watch this segment, and hear much more from Brennan, including brand development, capital raises and finding the right distribution partners, in his full interview with FBU.

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