Five Reasons Why A Business Plan Can Fail

As an institution that provides graduate and terminal business degree programs, the University of Fairfax provides education and opportunity for our students to become successful in their careers. However, sometimes plans for a business idea do not always come to fruition. There are many reasons why a business plan fails in today’s ever-changing market – here are five reasons that could be why failure may be on the horizon for plans.

  • Bad Business Idea

Although it’s a reason people would rather not think about when it comes to their business ideas, it is one that plagues many business pursuers. While the business plan may have all the t’s crossed and I’s dotted without a spec of imperfection, sometimes the market is not open to your plan or ideas. And the best course of action is to include your consumers in your plans – find out what they want and what they need before you implement a plan destined to fail.

  • No Differentiation

Just simply believing in your business plan does not prove to investors, lenders, etc. that your plan will produce a viable business. When entering a competitive market, your plan has to ensure that your idea will stand out amongst the other products already out there. If your plan doesn’t detail how your business will be viable in the sea of many others, then you will fail to build a brand or secure any capital to do so.

  • Lack of Employee Incentive

For you, your business plan is your dream, but for those working with you, your business plan is just a means to provide. If your plan does not include how you will incentivize your employees to meet your business goals, through salary and benefits, then you will hire employees that don’t have the best interests in success.

  • Lack of Flexibility or Inability to Learn from Failure

Building a successful business plan is hard work – but it’s even harder to recognize constructive criticism in what needs to be changed about our dream to make it viable. You should be ready to change things, even down to the grammar and spelling, within your plan in order to bring it into fruition. Sometimes, even when you have the most beautifully constructed business plan, not everyone will want to invest in your plan. Having flexibility in your plan and how you view it will allow you to move away from failure.

  • The Financial Plan is Missing

What investors, banks, and lenders want to know the most is your financial planning, and it is surprising that some will leave out those documents. Having reports of your initial costs, break-even, return on investment projections are what those giving you capital to turn your plan into a business want to see so that they know their investment is worth it. It is also beneficial to have estimations of future costs (replacing equipment for example) and legal costs. Those who create business plans without their financial reports should expect not to find success.

When business plans fail to become viable or fail to meet the expectations of partners and lenders, these five reasons could be possible reasons. In today’s market, those who wish to create a successful plan to map out their dream business must be willing to move flexibly and without trepidation. The University of Fairfax provides you with the education and skills necessary to create strong business plans and has the faculty and professors that can help you every step of the way. To learn more about our business programs, go to

The University of Fairfax – Secure Your Future

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