How to Write a Business Plan

Chapter 61The 100 mistakes

Strategy and positioning (1–10)

1. No clear statement of what the business actually does in the first paragraph
2. Confusing an idea with a business — no evidence anyone will pay
3. Claiming to have no competitors
4. Competing on price as the entire strategy
5. “Better service” offered as a differentiator with nothing to substantiate it
6. Targeting “everyone” as the market
7. Pursuing three growth vectors simultaneously in year one
8. A vision statement longer than the description of the product
9. Copying a business model without checking whether its economics work at your scale
10. No stated reason why now — why this opportunity exists in 2026 and not five years ago

Market and research (11–20)

1. Quoting national market size and implying a share of it
2. Top-down sizing with no bottom-up reconciliation
3. Statistics with no source, or sourced to a blog
4. Data older than three years presented as current
5. Survey results without disclosing sample size or method
6. Customer segments described demographically but not behaviourally
7. No evidence of a single conversation with a real prospective buyer
8. Assuming interest equals willingness to pay
9. Ignoring the informal sector as a competitor
10. Market growth rates asserted rather than sourced

Financial modelling (21–35)

1. A balance sheet that does not balance
2. Cash flow closing balance not equal to balance sheet cash
3. Hard-coded numbers inside calculation formulas
4. Revenue as a growth percentage rather than built from drivers
5. Hockey-stick revenue with no matching increase in capacity or marketing
6. Full capacity assumed from month one
7. Working capital not scaling with revenue growth
8. Debtor days assumed at 30 when the sector pays at 60–90
9. Owner’s salary excluded
10. Statutory employment costs excluded — UIF, SDL, COIDA, leave
11. Loan capital repayments run through the income statement
12. Capex expensed instead of capitalised and depreciated
13. Interest modelled at prime flat with no risk margin
14. No VAT treatment stated, or VAT mixed inconsistently between sections
15. Tax omitted entirely, or the wrong rate applied

The funding request (36–45)

1. No funding amount stated anywhere in the document
2. A round number that does not match the use-of-funds table
3. Use of funds described as “working capital and expansion” with no breakdown
4. No owner contribution, and no explanation of why
5. Asking for equity when the need is clearly working capital
6. Asking for a bank loan for a pre-revenue, asset-light start-up
7. No security offered and no guarantee alternative raised
8. Term mismatched to the asset life
9. No proposed rate, term or repayment profile — leaving the funder to construct the deal
10. Requesting the full amount upfront when a phased drawdown would suit both parties

Team and operations (46–58)

1. CVs describing personality traits rather than quantified achievements
2. No acknowledgement of any capability gap
3. Founder listed as full-time while employed elsewhere, undisclosed
4. Organogram showing roles that are not in the payroll schedule
5. Headcount schedule that does not reconcile to the salary line in the model
6. No succession or key-person cover for a business entirely dependent on one person
7. Licences listed by name but not by current status
8. Premises not secured, and no lease or offer attached
9. Equipment costed from a website rather than a dated supplier quote
10. Capacity at full utilisation lower than the year-three forecast volume
11. No energy plan for a power-dependent operation
12. Supply chain with a single source and no alternative identified
13. Process described in adjectives rather than steps, times and throughput

Risk and evidence (59–70)

1. A risk section listing “competition” and “load-shedding” and nothing else
2. Mitigations phrased as intentions rather than actions already taken
3. No likelihood or impact rating and therefore no prioritisation
4. Omitting the risk the funder is most obviously worried about
5. Customer concentration not disclosed
6. Prior business failure or judgment concealed rather than explained
7. Contracts referenced in the text but not attached
8. Letters of intent presented as though they were contracts
9. No insurance schedule
10. No sensitivity analysis at all
11. A downside scenario with no management response
12. Claiming certification or accreditation that is applied for but not granted

Compliance and administration (71–82)

1. Expired SARS tax compliance status
2. CIPC annual returns outstanding
3. B-BBEE affidavit or certificate expired
4. Bank statements that do not reconcile to stated turnover
5. Company name in the plan different from the name on the CIPC record
6. Shareholding in the plan different from the CIPC record
7. Shareholder percentages that do not sum to 100
8. No shareholders’ agreement where there are multiple owners
9. Applying under a programme whose criteria you do not meet
10. Applying against superseded programme criteria
11. Missing certified copies where certification is specified
12. Submitting after the stated closing date for a grant window

Writing and presentation (83–94)

1. An executive summary written first and never updated
2. Numbers in the narrative that contradict the model
3. Inconsistent currency formatting between sections
4. Financial statements pasted as images, unreadable when printed
5. Charts without axis labels or units
6. Spelling and grammar errors, which read as carelessness about detail
7. Jargon and acronyms never defined
8. Passive, hedging language throughout — ‘it is anticipated that’
9. Adjective inflation: innovative, dynamic, world-class, cutting-edge, passionate
10. No page numbers, so nobody can reference anything in a meeting
11. No version number or date
12. Sent as an editable Word file with tracked changes still visible

Process and behaviour (95–100)

1. Demanding an NDA before a first screening conversation
2. Sending the identical plan to twenty funders with no tailoring
3. Sending the plan to a generic info@ address rather than a named person
4. Being unable to answer basic questions about your own financial model
5. Becoming defensive when challenged rather than engaging with the objection
6. Failing to follow up, or following up daily — a fortnightly, substantive update is the correct rhythm

Chapter 62Why funders decline — the underlying reasons