1. No Plan - It is easy to put  off writing a business plan until you have no choice because your banker, investor, or potential landlord requires it. Unfortunately, that is the worst time to try and write a plan.
2. No Clear Audience - Why do you need a plan? Are you writing for the banker in hopes of getting a loan, or a potential investors or simply to guide your business.  While the outline is the same, the amount of detail required in each section varies depending on the audience.
3. Too Much Detail or the Wrong Type of Detail – Can you boil down the description of your business to a simple message without getting bogged down in the details?  Limit your product description to an overview, focusing on the problem your product solves and its unique features/  Remember to leave out the jargon and industry slang.
4. Poorly Defined Customer – Everyone is not your customer. With a clear, specific definition of your target customer, it is easier to write a clear, specific plan.
5. Limited Market Research – Just because you love your product or idea, it does not mean anyone else will.    (By “anyone,” I mean anyone other than your mom, spouse, or best friend.) Who are these people, and what will make them buy?
6. Underestimating your Competitors – Everyone has a competitor. Even truly innovative products must deal with competing products or services which may or may not solve the same problem, but ultimately will compete for the end customer’s available resources.
7. No Meaningful Goals and Milestones - What will you accomplish?  Be specific.  How long will it take you and how will you measure your progress along the way?
8. Activities Not Tied to Goals – Your goals form the basis of other decisions. Use the planning process to eliminate activities which do not move you closer to your goals.
9. Unsupported Financial Projections – Unrealistic financial projects with a hockey-stick-shaped growth curve, set up a business for failure when owners spend too much too soon without enough cash reserves to help the business through the startup phase. As you develop financial projections, consider two scenarios: a best case and a worst case.
10. Inadequate Consideration of Pitfalls – Stuff happens! Things go wrong. When the worst happens, will you be prepared? Having an adequate assessment of risks is not being negative — it is being prepared.
11. Failure to Communicate - I know, I promised a list of the ten most common mistakes, (but don’t you like getting the little extra from time to time? ) While not directly a part of your document, poor communication will have a detrimental affect on your business. As you write your plan, involve others.  Seek advice from people you respect. Talk to employees, family members, business partners, and advisers, such as your accountant and lawyer.

Need help getting your plan started?  You can download a free copy of my business plan outline

Related posts:

1. Every Business Needs a Plan
2. Business Plan Outline
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• Seed Funding Programs – There is a new wave of seed funding programs that take an equity position in your startup company in return for startup capital, mentoring, and product development services.  One such organization is SproutBox in Bloomington, IN.  SproutBox claims, “we are an elite crew of product developers, creatives and business experts. We invest our talent in startup companies with high growth potential in exchange for equity.”
• Microloan Programs – The Small Business Administration (SBA) has recently increased its commitment to their Microloan Program, by raising the maximum loan amount to $50,000 for small businesses.  These loans are fixed interest rate, up to a 72 month term, and can range from $5,000 to $50,000.  The Flagship Enterprise Center Microloan Program is Indiana’s newest and most active microlender, and is looking to help fund tech-based startups.
• SBA Express Loans – According to the SBA website, “the SBAExpress program gives small business borrowers an accelerated turnaround time for SBA’s review. You will receive a response to your application within 36 hours.”  There are also SBA preferred lenders that have the ability to lend in all 50 states.  One example of an SBA preferred lender is Strategies for Small Business, who can provide funding from $5,000 to $25,000.

So if you have a web-based startup idea, launch today.  In 2011, the rules have changed.  Anyone can start a successfully web-based company for less than the price of a new car.  Good luck!

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ARC loans can be used to make payments of principal and interest, in full or in part, on one or more existing, qualifying small business loans for up to six months. ARC loans provide an immediate infusion of capital to small businesses to assist with making payments of principal and interest on existing debt. These loans allow borrowers to redirect cash flow from making loan payments to investing in their businesses, to help sustain the business and retain jobs. For example, making loan payments on existing loans with proceeds from an ARC loan can allow a business to focus more funds on core operations, such as buying inventory or making payroll.

ARC loans are interest-free to the borrower, carry a 100 percent guaranty from the SBA to the lender, and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.

The best candidates for ARC loans are small businesses that in the past were profitable but are currently struggling, yet have been making loan payments or are just beginning to miss loan payments due to financial hardship.FAQs for Lenders and Borrowers.

ARC loans are made by commercial lenders who are SBA participants. The SBA will pay these banks a monthly interest rate throughout the term of the loan. Lenders can find more information here. Non-SBA lenders can easily become SBA participants by working with their nearest SBA district office. Businesses interested in applying for an ARC loan should first contact their current lender.

In order to qualify, a small business must be an established business, have financial statements demonstrating it was profitable in one of the past three years, and be able to project sufficient cash flow to meet current and future loan payments over a two-year period from loan approval. If your business does not meet these criteria, you can discuss your eligibility with your lender. ARC loans are not designed for start-up businesses.

You should always consider consulting a corporate finance attorney prior to taking out any sort of business loan to help you understand and receive favorable terms.

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• Government readies emergency small biz loans (money.cnn.com)
• Lenders hesitant on small biz stimulus loans (money.cnn.com)
• Small Business Administration ARC Loan Program Rules to be published June 8th (myventurepad.com)

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