A recent study of 29,000 startups found that 26,000 of them failed. Of those failures, 67% did not have a written business plan. Do you think it is a coincidence?
These are the top 10 myths that individual entrepreneurs often have about business plans, usually the reasons they don’t have one. Eliminate the myths and see how having a business plan for your solo business can be really easy and fun, and it can fuel your success!
1. Myth: 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 may have a lot of fun along the way and meet a lot of friends, but you will likely end up in a very different location than you originally intended, and you may have to call home to fund your return ticket. .
Solo entrepreneurial realitySuccessful lone entrepreneurs know that creating a business plan really helps them think through all the critical aspects of running a business, make better business decisions, and get profitable sooner.
2. Myth: I have to buy business plan software before I can get started.
Business plan software comes in many shapes, sizes, and prices. Many are more geared towards small, growing businesses with employees.
Solo entrepreneurial reality: The software can be useful, but it is not necessary. The software is more likely to help you if you have a more traditional type of business, such as a restaurant or a typical consulting business.
3. Myth: I need to hire a consultant to write my business plan.
Consultants are expensive and they really don’t know as much about your business as you do!
Solo entrepreneurial reality: Your business IS you, and you need to be intimately involved in creating your business plan. A better strategy, if you think you need professional help, is to hire a coach or mentor, someone who can guide you in what you need to do, not do it for you.
Four. Myth: The business plan templates I’ve seen have all of these complex sounding sections. I guess I need them all?
The only time you need to follow a specific scheme is if you are looking for financing.
Solo entrepreneurial reality: Your business plan should answer ten basic questions, that’s it! Don’t make things more complicated than necessary.
5. Myth: My business plan must be perfect before I can start my business.
If you wait for everything to be perfectly detailed, you may never start.
Solo entrepreneurial reality: If you have at least a first draft that answers those ten basic questions, you’re ready to launch your business! Make your business plan a living and evolving document. In the initial stages, review and update your plan every 2-3 months. As it grows and stabilizes, it can slow down the revision cycle to every 6-12 months. All business plans must be reviewed and updated at least once a year.
6. Myth: I have to do everything I say I am going to do in my business plan, or I will fail.
Many lone entrepreneurs never start because of this myth, which makes them feel that the success of their future business suddenly depends on every stroke of the pencil or click of the keyboard.
Solo entrepreneurial realityThink of your business plan as a roadmap for a trip. Expect to take some detours for road construction. Be flexible enough to go on some exciting, unplanned side trips. And don’t be surprised if you decide to go to Yellowstone instead of visiting Mount Rushmore, if it turns out that it better meets your vacation goals!
7. Myth: A good business plan has a good cover, it has at least 40 pages, it must be typed and double spaced …
Business plans for investors, such as a bank or venture capitalist, must meet certain requirements expected by those investors.
Solo entrepreneurial reality: As an individual entrepreneur, your business plan should only satisfy YOU. It can be scrawled on a napkin, sticky notes on the wall, or consist of a collage of images and captions. It can be all in one document or spread across multiple media. As long as you know it in your head and heart without looking at it, and it’s easily accessible to you when in doubt, that’s all you need.
8. Myth: 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 a company stock without seeing a prospect?
Solo entrepreneurial realityViewing your plan in black and white (or color if you prefer) can give you a whole new view of the financial viability of your business. If “doing the numbers” seems overwhelming, remember that you don’t need fancy spreadsheets. Just set a budget that shows where all the money is coming from (and where it is going), and have an accountant review it for additional perspective.
9. Myth: My business plan is in my head, that’s enough.
I don’t know about you, but sometimes I can’t remember what I planned yesterday to do tomorrow, if I don’t write it down!
Solo entrepreneurial reality: There is real power in writing your plans. Some schools of thought advocate that the act of writing a plan causes our subconscious to begin working on how to manifest that plan. And, of course, it is much easier to remember when you have it in front of you. And much easier to share and get comments from your non-mind-reading followers.
10. Myth: Friends and family are the best sources for 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 entrepreneurial reality: As intentional as our friends and family may be, they are simply not the best way to get honest and objective guidance. Instead, look for people who have specific knowledge to help you, who are willing to be honest with you, and who have a genuine interest in helping you succeed. A business coach is a resource to consider!