Top 10 Business Plan Myths That Lead Your Small Business to Failure
And How You Can Conquer Them!
As you run your small business, your chosen vehicle for the attainment of Financial freedom, you will come across situations where you need a Business Plan (BP). This may be just a draft BP, but can also be a more-complex one. The issue is that, often, we don’t create Business Plans in our small business because we think we don’t need them.
This wrong thinking is usually caused by some myths we believe about Business Plans: myths that lead us to believe we don’t actually need them, even though we do. Such erroneous thinking can lead your small business to assured failure.
This week’s reportage is culled from Teri Zwierzynski’s articles for solo-e.com. In them, Terri analyzes the top 10 Business Plan myths that affect small businesses, and warns against our letting these stop us from running our successful small business, As always, read and be inspired to positive action, to boost your small business’ performance. Here are excerpts from Zwierzynski’s piece…
One study of 29,000 business start-ups noted that 26,000 (almost 90%) of them failed. Of those failures, 67% had no mitten business plan. Do you think that’s a coincidence? Here are the top 10 myths Entrepreneurs often have about business plans usually, the reasons why they don’t have one. De-bunk the myths, and see how having a business plan for your small business, can actually be easy and fun —and can jump start 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 tip in a foreign country without a map. You might have a lot of fun along the way, but you are likely to end up at a very different place than you originally set out for — and you might have to phone home for funds for your return ticket.
Small Business Reality: Successful Entrepreneurs know that the exercise of creating a business plan really helps them think through all the critical aspects of running a business, 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.
Small Business Reality: Business plan software can be helpful— but it is not required. Software is more likely to help if you have a more traditional type business, like a restaurant or a typical consulting business.
Myth #3: I need to hire a consultant to write my business plan.
Consultants are an expensive way to have your business plan written.
Small Business 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 — someone who can guide you in what you need to do, not do it for you.
Myth #4: The business plan templates I have seen have all these complex-sounding sections to them!
The only time you need to follow outline if you are looking for funding.
Small Business Reality: Don’t make thing more complicated than it is.
Myth #5 My business plan needs to be perfect before i can start.
If you wait for everything to be perfectly detailed, you may never start
Small Business Reality: if you have at least a first draft that answers your basic questions you are ready to launch your business! Make your business plan a living, evolving document. In the start-up stages, review and update your plan every 2-3 months. As you grow and stabilize, you can review it every 6-12 months. All business plans should be reviewed and updated at least once a year
Myth #6: I have to do everything my business plan says, or I am a failure.
Many Small Business Entrepreneurs never start because of this myth — which leaves them feeling that the success of their future business suddenly rides on each stroke of the pen or click of the keyboard!
Small Business Reality: Think of your business plan as a road-map for a trip. Expect to take some detours for road construction. Be flexible enough to take some exciting, unplanned side trips.
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.
Small Business Reality: As a Small Business Entrepreneur, your business plan need only satisfy YOU. It might be scribbled on a napkin, on sickle notes on your wall, or consist of a collage of pictures and captions.
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?
Small Business 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 any fancy spreadsheets; just lay out 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 don’t write it down! Small Business 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, its 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.
Small Business 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!