Six reasons why business plans fail

Business planning traps to avoid.

At Ling Phipp we can provide help with writing a business plan, based on our experience of working with business in the Nottingham area. Here are six reasons why business plans fail – and how to make them succeed…

You may well have prepared a business plan some years ago to present to your bank manager. If you revisit that plan now, you will probably be surprised by how little relationship the position of your business now bears to that predicted in the plan. The reality is that most business plans fail. Here are some of the traps to avoid:

1. A dead document

A business plan that is created for a purpose and then discarded will always become obsolete quickly. Making your business plan a living document is essential if you don't want the whole process to be a failure. Only a regularly reviewed and updated plan can be the spur to look critically at your business on a recurring basis.

2. Over-optimism

Most business plans are over-optimistic, especially as regards predicted sales, often massively overestimating the size of the market. Research your market thoroughly. Too many business plans include a SWOT analysis, but concentrate on the strengths and opportunities and ignore the threats and weaknesses.

3. Ignoring the competition

Business plans commonly assume that the competition will make no competitive response or indeed, will have no new initiatives of their own. Study your competitors and try to second-guess their plans. A living document will take into account their actions.

4. New or old?

Too many business plans depend on doing something new, when what is needed is to find a better way of doing what is being done now.

5. Ignoring risk

What are the risks attached to the plan? Think through these and the costs of failure as well as the rewards of success.

6. Profit or turnover?

If expansion is planned, it should result in increased profits, not just sales. Expansion requires finance, people and other resources. Can you get them?

Remember, a good business plan is as much about the process as the final document. Creating your plan will open your eyes to the realities of your business. Keeping it updated will help you stay on the right track. For help with developing your plan, call us.

Start-ups and established businesses in the Nottingham area looking for help with writing a business plan should contact Ling Phipp for more help and advice.

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About us

Ling Phipp was founded in 1974 and nowadays has two partners, six managers plus trainees and support staff.

We serve clients in the East Midlands and all over the UK. Our out-of-town location, with easy parking, close to the M1 junction 25 (Nottingham/Derby - A52), is very convenient.

Company details

0115 949 6838

Ling Phipp, Cliffe Hill House, 22-26 Nottingham Road, Stapleford, Nottingham NG9 8AA


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