Business Assumptions aren’t the problem—being blind to them is.

“Why Most Business Plans Fail Before They Even Start”

All Predictions Are Assumptions.

Let me hit you with something that most business owners don’t want to hear: 

Every forecast you make… every plan you build… every goal you set… is based on assumptions.

It doesn’t matter whether you’re writing a business plan, mapping out your sales targets, or launching a new product. You’re making guesses about the future, and calling them “plans.” Now, making assumptions isn’t the problem. We all have to do it. The problem is this:

Most people never write down their assumptions. And even fewer ever test them.

That’s a massive mistake. I’ve seen it destroy perfectly good ideas. Let me give you a real-world example:

A freelance graphic designer I once mentored planned to hit £5k/month within 90 days. How? By signing 10 clients paying £500/month. That was the plan. So I asked, “How do you know 10 clients will pay £500/month for what you offer?” She looked at me blankly.

She hadn’t tested it. She just assumed she’d be able to get those clients because… well, other designers were doing it, right? Wrong. That £500 price point wasn’t validated. The clients she was targeting were used to paying £150–£200. The whole plan was built on sand.

Or take the startup that launched a subscription box business. They predicted 1,000 subscribers by month three. Their marketing plan looked airtight: Instagram ads, influencers, giveaways. But no one had tested whether the target audience even wanted the product. By month three, they had 74 subscribers and a warehouse full of unsold stock.

Every failure I’ve seen in business planning has one thing in common: shaky, untested assumptions that were treated as facts.

And here’s the scary part: most business owners don’t even realise they’re doing it. They treat their plan like gospel… when it’s really a bundle of guesses they never took the time to challenge. So if you want a plan that actually holds up in the real world, start by doing something most people never do:

Write your assumptions down. Then ask: what if I’m wrong?

Because hope isn’t a strategy. And untested assumptions? They’re just hope in disguise.

2. What Is an Assumption in Business Planning?

Let’s strip the fluff and get clear: An assumption is something you believe to be true, but haven’t proved.

It’s a bet. A guess. A leap. And whether you admit it or not, your business is full of them. Most people think assumptions are harmless. But when you build a plan (any plan) on untested assumptions, you’re building a house of cards. One wrong assumption, and the whole thing falls over.

Let me give you a few examples of common business assumptions:

• “There’s demand for this product in my area.”
• “People will pay £50/month for this service.”
• “We’ll get 100 leads a week from Facebook Ads.”
• “Our conversion rate will be 10%.”
• “The supplier will deliver in three days—like they always do.”
• “We don’t need a backup because nothing will go wrong.”

Every one of those is an assumption. And every one of them can take you down if you don’t recognise it as such.

Here’s the problem: most small business owners don’t think in terms of assumptions. They think in terms of plans. But what they call a plan is often just a list of unchecked guesses. 

I once worked with a small events company that expected 200 people to show up to their paid seminar. They hired a big venue, brought in a speaker, and spent thousands on materials and staff. I asked, “How do you know 200 people will attend?” They said, “We’ve got 1,200 followers on Instagram and a decent email list.”

That was it. No early registration. No RSVP testing. Just the assumption that a percentage would show up. Guess how many turned up? 19. They lost money, credibility, and confidence—because they confused assumptions with facts.

Here’s the rule:

If it’s not proven, it’s an assumption. And if you don’t know your assumptions, your plan isn’t a strategy, it’s wishful thinking.

Every pricing model, marketing campaign, cash flow forecast, and hiring plan should start with one question:

“What needs to be true for this to work?”

That’s how you surface assumptions. You bring them into the light where they can be tested, not buried inside your spreadsheet or your gut feeling. Because in business, the difference between success and failure often comes down to this: 

The winners challenge their assumptions. The losers run with them.

3. The Hidden Biases Behind Untested Assumptions.

If assumptions are the seeds of your plan, then biases are the weeds choking them out. Here’s the uncomfortable truth:  Your brain is working against you.

You think you’re being logical. Objective. Strategic. But in reality? You’re hardwired to protect your own ideas, justify your guesses, and overlook your blind spots. This is where cognitive bias kicks in, and it’s one of the biggest reasons business owners make poor decisions without realising it.

Let me walk you through the most common biases that infect your assumptions (and your plans):

3.1. Confirmation Bias.

You look for information that proves you’re right—and ignore everything that doesn’t.

“I spoke to three people who loved the idea.” Yes—but what about the twelve who didn’t?

Example: A startup assumes people will pay £100/month for a new SaaS tool. They find two people who say “yes” and run with it. They ignore the 80% who said “too expensive” or “I don’t see the value.” This is how weak ideas survive long enough to kill your business.

3.2. Optimism Bias

You assume things will go better than they probably will.

• “We’ll hit break-even in six months.”
• “The campaign will bring in 500 leads.”
• “It won’t take more than two weeks to build.”

No, it won’t. And no, it doesn’t.

Optimism bias makes you underestimate how long things take, how hard things are, and how much they’ll cost. It’s why so many business plans die after launch; they were built on fantasy timelines.

3.3. Survivorship Bias.

You only look at success stories—and forget how many failed trying the same thing.

“X built a 7-figure business in 2 years with YouTube ads. So can we.”

Yeah, but how many people ran YouTube ads and lost everything? How many built the same funnel and never got off the ground? Survivorship bias tricks you into believing the odds are in your favour—when they’re not.

3.4. Anchoring Bias.

You latch onto the first number or idea you see, and build everything else around it.

“Our competitor charges £500/month, so we should too.”
“Facebook CPC is £1.20. We’ll assume £1.20 in our forecast.”

This is dangerous. The first idea sets the tone for everything—even when it’s dead wrong. Anchoring creates a false sense of certainty. And certainty is the enemy of good planning.

3.5. Planning Fallacy

You think the plan will go exactly as planned.

Every plan looks perfect—until it meets reality.

“We’ll hit the market in March, start selling by April, and be profitable by June.”

This is fantasy. Business is messy. Things break. Delays happen. People don’t respond how you expect. The planning fallacy makes you forget that—and makes your plans dangerously fragile.

3.6. Hindsight Bias.

You believe, after something happens, that you “knew it all along.” “Yeah, I had a feeling that ad campaign wasn’t going to work.”
“I always thought that market was too crowded.” No, you didn’t.

You just think you did because now the outcome is obvious. But at the time, you didn’t act on that “feeling,” you didn’t document your doubts, and you didn’t test the assumption. You moved forward as if it were solid. Hindsight bias is dangerous because it tricks you into thinking you’re better at predicting outcomes than you really are. And if you think you’re better at forecasting than you are, you won’t take your current assumptions seriously enough.

You’ll skip the hard part: testing, validating, and challenging what you believe now, before reality proves you wrong.

Here’s the takeaway:

If you’re serious about building a business that can handle real-world pressure, you have to go to war with your own assumptions and the biases that protect them. Most people won’t do that. That’s why most businesses fail. 

If you don’t account for these biases, your assumptions aren’t just wrong, they’re delusional. You’ll make bold moves based on bad guesses. You’ll feel confident right up until reality punches you in the mouth.

The solution? Build in checks. Challenge your own thinking. Assume you’re wrong, then prove you’re right.

Because if you don’t actively fight your brain’s built-in stupidity, it will cost you time, money, and momentum.

4. Why Business Plans Often Fail: Assumptions Left Unchallenged.

Here’s a hard truth:

Most business plans look great until the business starts.

On paper, everything adds up. Revenue projections are healthy. The timeline makes sense. Marketing channels are lined up. It all seems solid. But it only takes one wrong assumption to blow the whole thing apart.

Let me give you a few examples I’ve seen firsthand.

Example 1: The Revenue Mirage.

A marketing agency came to me with a 12-month growth plan. They were forecasting £25k/month in recurring revenue by month six. Looked good. I asked, “Where’s that revenue coming from?” They pointed to a pricing table and said, “We just need to sign 10 clients at £2.5k/month.” I pushed again: “How many clients do you have now?”

“None yet—we’re launching next month.” So I asked, “How do you know people will pay £2.5k/month for this offer?” Cue awkward silence.

There was no data. No validated pricing. No previous clients. Just an assumption (hidden in a spreadsheet cell) that those numbers would “probably” happen.

Spoiler: They didn’t.

They had to slash prices, reposition the offer, and rebuild their plan from scratch… three months and £8,000 later.

Example 2: The Traffic Trap.

Another common one: the “we’ll get leads from Facebook” plan. A small online retailer forecasted 1,000 visitors a day from Facebook Ads, with a 2% conversion rate. Sounds reasonable, right?

Except they’d never run Facebook Ads before. They didn’t know their actual CPC, click-through rate, or conversion rate. They based their entire sales forecast on a guess they’d read in a blog. When the ads ran, traffic was half what they expected. Conversions were worse. Their break-even point moved from month 3 to month 9 overnight.

The problem wasn’t the ads. The problem was that nobody challenged the assumptions behind the plan.

Example 3: The Supply Chain Assumption.

A client in modular construction assumed their main supplier would deliver parts in 5–7 days, as they always had. But when that supplier got hit with a backlog, deliveries stretched to 14–21 days, and everything downstream collapsed. Projects delayed. Cash flow jammed up. Staff idle.

They had no contingency because they’d never written down the assumption:
“Supplier will deliver within 7 days.”
If they had, they could have asked the golden question: What if this doesn’t happen?

The Pattern:

When I dissect failed business plans, I usually don’t find bad ideas or poor intentions. I find unspoken, untested assumptions hiding underneath:

• “This market will want what we’re offering.”
• “These numbers are achievable.”
• “This timeline is realistic.”

None of these were challenged. No backup plans were built.
And when reality punched back, the plan folded.

The Fix:

Before you bet your time, money, and energy on a plan, ask:

“What assumptions are we making here? And what happens if we’re wrong?”

If you can’t answer that, you’re not planning, you’re just rolling dice.

5. How to Make Assumptions Work for You (Not Against You).

Assumptions aren’t the enemy.

Unguarded assumptions are.

If you know what assumptions you’re making (and test them early), they become tools, not traps.

This is exactly what we do inside our 365/90 Business Planning Process. Every plan includes an Assumption Register as standard. Because if you want to build something that works in the real world, not just in a spreadsheet, you have to manage your assumptions like risk.

Here’s how.

a) Identify Your Assumptions.

Every time you write a plan, ask this one powerful question:

“What must be true for this plan to work?”

That question alone will surface assumptions hiding under the surface.

Examples:

• “People will respond well to our pricing.”
• “Our conversion rate will be at least 10%.”
• “This supplier will deliver within 3 days.”
• “Our tech won’t crash under load.”
• “We’ll get 30 leads per week from organic SEO.”

Write them all down. That’s your Assumption Register: A list of every key belief you’re building on. This single act makes your plan stronger than 90% of small business plans I’ve seen.

b) Rank Them by Risk.

Not all assumptions are equal.

Some, if wrong, will cost you minor tweaks. Others will wipe you out.

In our 365/90 system, we tag assumptions using two simple filters:

• Impact (What happens if it fails?)
• Certainty (How sure are you it’s true?)

A high-impact, low-certainty assumption is a red flag. You test those first.

Let’s say your whole revenue forecast relies on converting 10% of website visitors. But you’ve never run traffic before. That’s a high-risk assumption. It needs to be validated before you do anything else.

c) Test Fast, Test Small.

You don’t need to run a 6-month campaign to test an assumption. You need a fast, cheap feedback loop.

Examples:

• Not sure if people will pay £49/month? Run a landing page with pricing before you build the product.
• Don’t know if your audience wants a new feature? Do a survey or quick call with 10 real customers.
• Think Facebook Ads will bring in leads? Test £100 before budgeting £5,000.

The goal is to learn fast, fail small, and adjust early. That’s why the 30/90-day window in our process works—it gives you space to test assumptions without sinking the ship.

d) Review and Revise.

Here’s the part most people skip: Go back and revisit your assumptions every 30-90 days.

In our 365/90 Review Process, we check:

• Which assumptions held up?
• Which ones didn’t?
• What did we learn?
• What changes need to be made to the plan?

Because planning isn’t a one-and-done activity. It’s an evolving process, especially when the market, tech, customer expectations, and your offer are always shifting. Your assumptions aren’t set in stone. They’re hypotheses. Treat them that way.

Bottom Line:

Assumptions aren’t the problem. Not knowing what you’re assuming is. When you document them, rank them, test them, and review them, your plan becomes more than a wish; it becomes a system that can survive impact.

If you’re not already doing this, you’re gambling. And in business, gambling without knowing the odds is just bad planning.

The Assumption Matrix: Certainty vs. Impact.

Use this tool to sort your assumptions and prioritise which ones to test first.

1. The Two Axes

• Certainty:
  How confident are you that the assumption is true?
  (High = you’ve tested it or have strong evidence; Low = you’re guessing or relying on gut)

• Impact:
  What happens if you’re wrong?
  (High = it affects revenue, delivery, brand, operations, cashflow; Low = minor inconvenience)

🔴 Top-Left: Test Immediately

These assumptions are dangerous. If you’re wrong, your whole plan is at risk, and you’re not even sure you’re right.

Action: Test first. Design lean experiments. Spend real time here before executing the rest of the plan.

🟡 Top-Right: Monitor & Mitigate

You’re confident, but if you’re wrong, it still hurts. Even proven assumptions can shift over time.

Action: Monitor regularly. Build contingency plans just in case.

🟠 Bottom-Left: Test If Time Allows

You’re unsure, but the impact is low. These can wait, but they shouldn’t be ignored forever.

Action: Note them down. Test later or delegate to the team.

✅ Bottom-Right: Safe to Proceed

Low risk. High confidence. No need to waste time here.

Action: Move forward. Focus energy elsewhere.

How We Use This in the 365/90 Planning Process

Every assumption captured in your Assumption Register is plotted on this matrix during the planning phase.

This gives you:

• A clear visual risk profile
• A prioritised testing list
• Fewer surprises later

It’s simple, fast, and incredibly effective.

Example Matrix (Text Format)

6. How Mentoring Helps Expose Faulty Assumptions

Let me be blunt:

You are the worst person to spot your own assumptions. Why?

Because you’re emotionally attached to your ideas. You’re inside the business. You’re inside your own head. And when that happens, it’s near impossible to challenge your own thinking. That’s why having a mentor isn’t a luxury—it’s a strategic advantage.

A Good Mentor Does Three Things:

6.1. They Don’t Let You Get Away With Flimsy Thinking.

When you say,

“We’ll just launch this and figure it out as we go…”

A good mentor stops you and asks:

• “What needs to be true for that to work?”
• “What are you assuming right now?”
• “Where’s the data behind that belief?”

It’s uncomfortable—but it saves you from wasting months (or years) chasing shadows.

6.2. They See the Blind Spots You Can’t.

You might not realise your whole pricing model is based on one competitor’s website. Or that your projected sales rely on a channel you’ve never used. Or that your customer demand is based on a handful of people “saying they’re interested.”

A mentor sees what you’ve missed because they’re outside the storm, and they’ve walked through dozens of storms before. They’ve seen businesses succeed, fail, pivot, stall, and scale. They know what assumptions usually break.

6.3. They Help You Move From Hope to Evidence.

I’ve mentored countless business owners who believed in their idea, but hadn’t tested it. They were guessing. And they knew it. I didn’t give them the answers, I gave them the questions that forced clarity:

• “How do you know?”
• “What are you basing that on?”
• “Have you proven this, or are you assuming it?”

When they finally laid out their assumptions, it was like someone had turned on the lights. They could see what was real, and what was wishful thinking. That’s when the real planning started.

Mentoring Makes Planning Safer, Faster, and Smarter.

Inside our 365/90 Business Mentoring Process, we do this by default. We don’t just help you build the plan. We help you challenge it.

• We surface every key assumption.
• We map them using our Assumption Matrix.
• We test them, track them, and adjust fast—so you can move with confidence, not guesswork.

It’s like putting on x-ray goggles for your business thinking. Because in business, speed matters. But certainty matters more. And if no one’s challenging your assumptions, you’re probably building your plan on sand.

7. Final Word: If You’re Not Challenging Assumptions, You’re Guessing.

The difference between a strong business plan and a weak one isn’t how pretty the spreadsheet looks. It’s how clearly you’ve identified, tested, and challenged your assumptions. Because if you don’t know what you’re assuming… you don’t know what you’re risking.

Every decision you make, your pricing, your marketing, your product, your people, is based on something you think is true. The question is: Have you tested it?

Most business owners don’t. They confuse confidence with clarity. They build plans on hope, not evidence. And they pay for it, later and painfully. But it doesn’t have to be that way.

When you get the right process in place, and someone in your corner asking the hard questions, you stop guessing. You stop gambling. You start leading.