Which of the following is a common pitfall to avoid when creating a business plan?

Making unrealistic assumptions is a significant pitfall to avoid when creating a business plan because it can lead to a lack of credibility and cause potential investors or stakeholders to lose trust in your vision. When assumptions about market conditions, revenue projections, or customer behavior are not based on realistic data or research, the business plan can misguide strategic decisions and financial planning.

A business plan should be grounded in achievable goals and informed by thorough research. Being overly optimistic without supporting data creates vulnerabilities that can severely impact the business in the long run. By setting realistic assumptions, you ensure that your plan is practical and more likely to succeed, as it reflects true market conditions and operational capabilities. This approach also helps to prepare for potential risks and challenges rather than gloss over them with wishful thinking.