Too few small businesses have a current business plan, often due to a belief in one or more of the following myths. By dispelling some of these myths, I hope that a few small business owners will decide that now is the time to write a business plan and it will quickly become one of their most valuable management tools.
Myth #1: Business plans have to be long, detailed and well presented.
Reality: If you have plenty of time and you like working this way, go for it. However, for most of us it is preferable to keep them short and without much formatting. This is because a business plan should be checked and updated often, and having an overly complex business plan is likely to discourage you from doing this and lead to it getting forgotten in a draw somewhere rather than as a key document that helps you run your business.
Myth #2: There is a right and wrong way to write a business plan.
Reality: The most common reason I hear for not having a business plan is “I don’t know how to write one”. There is no business plan rules committee telling you what you can and can’t put in your business plan. It’s your plan, so write what you want to write! Over time you can improve your plan by learning about what others do, however if the only thing stopping you from writing a business plan today is not knowing what to write then just start writing something… anything… and worry about improving it later. Even a couple of paragraphs detailing why your business exists and one or two goals for the future is a great start and can be built on as new ideas come to mind.
Myth #3: Business plans are really for other people to read, so if no one is asking to see yours then you don’t need one.
Reality: There are many people that may ask to see your business plan – banks, clients, business partners, etc. So go ahead an prepare something for them and call it a business plan if you like. However, you should always have a business plan that is only for the owners of the business to see, for reasons which will become clearer when we look at myth #4.
Myth #4: You business plan should show your company in its best light.
Reality: If your bank or a customer asks to see your business plan, go ahead and give them a version of your business plan that shows your company in a good light. (In effect, give them a detailed marketing document which is titled “Business Plan”). However, you should always have a business plan that discusses all the negatives in your business – your weaknesses, the strengths of your competitors, the threats to your business, etc. Admitting to these issues and putting them in writing will get you one step closer to addressing them and that is clearly a better strategy than ignoring them and hoping they will just fix themselves.
Myth #5: Once you have a business plan you should stick to it.
Reality: I often hear people say “If I have a business plan that I stick to I cannot be flexible, while if I have a business plan I don’t stick to then it serves no purpose… so what’s the use!”. There is a very good reason, and that is because you can use the business plan like this: stick to your business plan until you don’t want to and then don’t, but make sure that when you do deviate from the business plan that it is a conscious decision rather than something that just happens without much thought. By consciously deciding to deviate from your plan you are saying to yourself “my new plan of action is better than the one outlined in my business plan, and I would rather do this”, in which case you absolutely should go ahead and follow your new plan of action. You should then follow this up by finding a few moments to quickly update your business plan (which will be easy if you followed tip #1) to reflect your new and improved thinking. Now, for every major decision you have two choices: either reject the new idea because it conflicts with your business plan and then congratulate yourself for having a plan that helped you make a good business decision; or, take the new path, update your business plan, and congratulate yourself on having further improved your business plan. Either way you win!
