A business plan or proposal is a great way to explore a business idea. It provides the opportunity for an in-depth analysis of the business as well as a chance for self-assessment on the part of entrepreneur (to evaluate his/her level of readiness for the challenges of owning and running a business)
1. Generic risks. One key element of a plan/proposal is to clearly define the risks involved in the business as well as steps that can be taken to mitigate such risks, however; some business plans assume generic risks. It is often good to take time and think about all possible risk scenarios that the business will/should/might face. If you are thinking of attracting an investor or taking a loan, generic risks will almost certainly put investors and loan providers off as your business plan/proposal will be lacking in-depth business risk analysis(identifying the risks, understanding underlying factors, analyzing the causes and suggesting the business’s method of mitigating the risks) . Assessing all possible risk scenarios is usually helpful for investors and also serves as the basis for developing business strategies.
2. Ambitious pricing fundamentals. Most business plans come with very detailed financials, sometimes spanning over five or ten years, however, some plans are quite ambitious with their figures as they lack overhead details or the margin to be re-invested into the business, leading to understated expenses or overstated profits. Normally, this is where price models and assumptions come in handy as most do take into account overheads and margins. It is advisable to be quite cautious and to critically evaluate overheads that the business might incur during its operations.
3. Very long business plans. Some people are quite good at writing and can go on for ages, however, some long write-ups end up losing the plot and the reader loses interest. To keep your reader’s interest, it is important to keep the business plan/proposal detailed yet concise and straight-to-the-point. You can write supplementary information, with as much detail as you like and attach to the plan/proposal. Furthermore, when your business plan/proposal attracts potential investors or loan providers, they will want to meet you and ask questions (I believe that the nature of their questions shows their level of interest), this would provide the opportunity to show your passion for your business idea.


I am certain that there are some other pitfalls, please add yours