A recent study of 29,000 business startups noted that 26,000 of them failed. Of those failures, 67% had no written business plan. Think that’s a coincidence?
Here are the top 10 myths Solo Entrepreneurs we have about business plans – usually, the reasons why they don’t have one. Solo Entrepreneurs need to De-bunk these myths. From there they can see how having a business plan for can actually be easy and can jumpstart your success!
MYTH #1: I don’t need a business plan-it’s just me!
Starting a business without a plan is like taking a trip to a foreign country without a map. You might have a lot of fun along the way, and meet a lot of friends, but you are likely to end up at a very different place than you originally set out for. Plus you might have to phone home for funds for your return ticket.
Solo Entrepreneur Reality: Successful Solo Entrepreneurs know that the exercise of creating a plan for their business really helps them think through their business. The business plan helps you think through all the critical aspects of running a business. From it, you are able to make better business decisions and get to profitability sooner.
MYTH #2: I have to buy business plan software before I can start.
Business plan software comes in many shapes and sizes, and prices. Many are more geared at small and growing businesses with employees.
Solo Entrepreneur Reality: Software can be helpful but it’s not required. The software is more likely to help if you have a more traditional type of business, like a restaurant or a typical consulting business.
MYTH #3: I need to hire a consultant to write my business plan.
Consultants are expensive and don’t really know as much about your business as you do! While seeking advice from people who are in business is recommended, you need to be in charge of your planning process.
Solo Entrepreneur Reality: Your business IS you and you need to be intimately involved with the creation of your business plan. A better strategy, if you think you need professional help, is to hire a coach or mentor. Find someone who can guide you in what you need to do, not do it for you.
MYTH #4: The business plan templates I’ve seen have all these complex-sounding sections to them. I guess I need all those?
The only time you need to follow a specific outline is if you are looking for funding. If you are not looking for funding, you only need to write your plan in a manner that makes sense to you. After all, the business plan is your guide. Your point of reference as you create your business and bring it to life.
Solo Entrepreneur Reality: Your business plan needs to answer ten basic questions that’s it! Don’t make things more complicated than necessary.
MYTH #5: My business plan needs to be perfect before I can start my business.
If you wait for everything to be perfectly detailed, you may never start. It is important to have the business plan as a guide, but you don’t have to wait to get it right before you start.
Solo Entrepreneur Reality: If you have at least a first draft that answers those ten basic questions, you are ready to launch your business! Make your business plan a living, evolving document. In the startup stages, review and update your plan every 2-3 months. As you grow and stabilize, you can slow down the review cycle to every 6-12 months. All business plans should be reviewed and updated at least once a year.
MYTH #6: I have to do everything I say I’m going to do in my business plan, or I’m a failure.
Many Solo Entrepreneurs never start because of this myth. This is the main reason that leaves them feeling that the success of their future business suddenly rides on each stroke of the pen or click of the keyboard!
Solo Entrepreneur Reality: Think of your business plan as a roadmap for a trip. Expect to take some detours for road construction. Be flexible enough to take some exciting, unplanned side trips. And don’t be surprised if instead of visiting Mount Rushmore, you decide to go to Yellowstone, if that turns out to meet your vacation goals better!
MYTH #7: A good business plan has a nice cover, is at least 40 pages long, must be typed and double-spaced…
Business plans intended for investors, such as a bank or venture capitalist, must meet certain requirements that such investors expect. But for yourself, you need a document the is readable.
Solo Entrepreneur Reality: As a Solo Entrepreneur, your business plan need only satisfy YOU. It might be scribbled on a napkin, on stickie notes on your wall, or consist of a collage of pictures and captions. It might be all in one document or scattered among several mediums. As long as you know it in your head and heart without having to look at it, and and it is easily accessible to you when you have doubts, that’s all that is necessary.
MYTH #8: I don’t need a loan so I don’t need a business plan.
YOU are the investor in your business and would you invest in the stock of some company without seeing a prospectus?
Solo Entrepreneur Reality: Seeing your plan in black and white (or color, if you prefer!), can give a whole new view on the financial viability of your business. If “doing the numbers” seems overwhelming, remember you don’t need fancy spreadsheets. Just layout a budget that shows where all the money is coming from (and going), and have an accountant review it for additional perspective.
MYTH #9: My business plan is in my head, that’s good enough.
I don’t know about you, but I sometimes can’t remember what I planned yesterday to do tomorrow if I don’t write it down!
Solo Entrepreneur Reality: There is a real power in writing down your plans. Some schools of thought advocate that the act of writing a plan down triggers our subconscious to start working on how to manifest that plan. And, of course, it’s a lot easier to remember when you have it in front of you. And a lot easier to share and get feedback from your non-mind reading supporters.
MYTH #10: Friends and family are the best sources of feedback and advice on my business plan.
If your brother is an accountant and your best friend is a market research expert, then this might be true.
Solo Entrepreneur Reality: As well-meaning as our friends and family can often be, they just aren’t the best way to get honest, objective guidance. Instead, seek out folks that have specific knowledge that will help you, are willing to be candid with you, and that have a genuine interest in helping you succeed. A business coach is one resource to consider!