C1 Unrealistic and Over-Ambitious Business Plans
Unrealistic sales and profit goals can create expectations which are difficult to achieve due to tight deadlines and limited resources. This can have a negative impact on a range of stakeholders. Employees can become demotivated when they do not achieve their targets, reducing their effort. Investors may lack confidence in the profitability which reduces future investment and growth opportunities.
An exaggerated market size means that the estimated demand for existing or potential goods or services is much higher than reality. This can lead to costly business decisions which lead to financial issues when actual sales do not meet expectations. These decisions include investment resources, spending on entering new markets, promoting products to mass markets and ultimately investing in the production of products that do not sell.
