Integrative Business Planning: 10 Tips on Common Pitfalls to Avoid

Business planning, whether at the start of a new company or during its growth, requires an integrative approach. It is important that all crucial aspects are addressed and balanced. The following tips show some of the common mistakes to avoid in the business planning process:

1. Certain aspects of a detailed and integrated business plan are ignored. A typical example would be market research. This is often due to the cost and time involved, lack of knowledge or ignorance of their importance.
2. The different aspects of the business do not match. For example, it is important that there is a good fit between the team and the opportunity.
3. Overly optimistic projections are used. Sales and market share projections are often unrealistic.
4. Assumptions are not tested or adjusted when necessary. An example would be where $x of marketing is supposed to result in $y of sales.
5. Not enough time is allowed for the business planning process. The importance of proper planning is often denied in favor of execution.
6. The opposite of tip number 5 also happens regularly. New entrepreneurs especially tend to fall into the trap of over-planning and almost seeing the business plan as an end in itself. There must be a good balance between planning and execution.
7. The use of resources is underestimated. Typically more people, time, and materials are needed than anticipated. This causes insufficient capital and cash flow budgets with potentially serious consequences.
8. Critical obstacles and even fatal hazards are ignored. It is important to work through and resolve any potential issues and not turn a blind eye.
9. No measurable and achievable goals or milestones are set.
10. A big problem with adhering to the requirements of integrated business planning is that entrepreneurs often have preconceived ideas that they don’t budget for. This may be due to a lack of knowledge combined with specific personality profiles. It is extremely important to be flexible, admit when you are wrong, and get help when needed.

Copyright © 2008 – Wim Venter