Business plans fail for thousands of reasons when you test them in the real world. However, when you really look at them and try to summarize those reasons, there are probably only few main reasons that why they failed.

-You don’t understand your own products/services/team enough.

In this scenario, you will most likely end up with an unclear business plan or plan that doesn’t have focus. There is no way for your investors to understand your products/services if you don’t make it clear enough that the majority will be able to understand. You will also end up with a bad team or unclear role of your team players. This is also fatal for most of the start-up companies.

-You don’t understand your customer segmentation in the market.

In this case, you will overestimate or underestimate your target market size which will either come up with an over optimistic financial projection that no investor will believe or an unattractive financial projection that no investor will put in their money.

-You don’t understand your competitors.

In this scenario, you will have a inaccurate forecast of your future sales and cash flow which will directly harm the trust of your investors and your team.