If you think writing a business plan sounds about as appealing as spending a Saturday in traffic court or letting Great-Aunt Gertrude set you up on a blind date, you're not alone. When you've got a great business idea, why sit on the sidelines dealing with piles of paperwork? You'd rather just jump into the game. But even Mark McGwire prepares before he steps up to the plate. And rushing into business without a business plan is about as smart as heading into the Major Leagues without spring training. If you believe the myths about business plans, you could strike out big-time.
Debunking the Myths
�Myth #1: Business plans are boring. Not so, says Vicki L. Helmick, a CPA and business consultant in Orlando, Florida. "If you're excited about your business, you should be excited about doing the planning that will make it a success," Helmick points out. "Your business plan is where you articulate your vision of what you want your company to be, and then outline a strategy to make it happen."
�Myth #2: Business plans are complicated. A good business plan doesn't have to be formal or complicated, Helmick says, but it must be thorough and in writing. "For a simple business, you may only need a page or two," she says. "Or you may take 20 or 30 pages and include charts and graphs. The key is to make it as detailed as necessary to give yourself a road map."
�Myth #3: I don't need to write my plan down. Many solo operators don't bother putting their plans in writing, but it's not enough to just have the information in your head. Besides making it easier to remember, committing the plan to paper forces you to think through each step of the process, consider all the consequences and deal with issues you might prefer to avoid. It also increases your sense of accountability, even if it's just to yourself. After all, once you've written the plan down, you have an obligation to either follow it or come up with a good reason for doing something different. Plus, if you have partners, a written business plan reduces the risks of misunderstandings or conflict.
�Myth #4: I only have to do it once. Writing a business plan is not a one-time exercise. "Don't write your plan, pat yourself on the back and then stick it on the shelf," Helmick says. "This should be a tool you use to run your company every day. If you want to obtain loans or attract outside investors, either in the start-up stage or down the road, you'll need to show them a strong plan that you've kept current to demonstrate the viability of your company."
Your plan should project at least five years into the future. "Under the umbrella of the term 'business plan,' you need a one-year plan, a two-year plan and a five-year goal," Helmick says. "Each year, update your plans and goals so you always have a focused, long-term strategy and short-term plans."