Posted on 11/08/2018 in Business Planning

3 Myths About Business Planning

3 Myths About Business Planning

Planning your business is a key step to having successful business operation. Yet a majority of women in small business rarely stop to write how they intend to grow a successful business. The fact that 3 of 5 small businesses fail in the first three to five years should raise warning signals that planning is necessary to make operations a success.

So a question that lingers is, "Why is a business plan so difficult for some entrepreneurs to create?"

This is a question a professional business consultant must know how to answer. Here are three myths that are common among entrepreneurs and often give them the impression that writing their operations document is unnecessary.

1. Just for Start Ups

You can write your business plan at any stage in your operations. In fact, one of the factors that lead to failure is a lack of planning. Like anything else; "Fail to plan and plan to fail." A simple document that you develop over a short period of time can be the key to doing business in a successful manner.

The beginning of a business is the most common time when a business plan is written. This is when a plan can help put a business on a solid foundation. However, a properly prepared business plan should function as a living document. That means it must grow and change with the business.

Therefore, a business plan can be changed, upgraded or developed at any stage of the business operation. In fact, many people do start without a written document in hand. They just get their business license and start working their business. Later, they stop to write a plan to analyze the business operations. The plan helps to determine future growth patterns, see what's bringing in the most money and where adjustments should be made.

2. Must be Huge

The myth that writing a business plan means having to stop everything in your life for months keeps many entrepreneurs from even starting a business plan. It is true that a business plan can certainly be extensive. In fact, some can be hundreds of pages with multiple extensive and complex financial projections. But that is for specific purposes such as for investor financing or finding joint venture partners.

Most of these documents can range from one to 20 pages. The point is to make it a document that makes sense for the business you are operating. If you can write what you want to do in one page, that's all you need. You can whip that up in a few hours. The main thing is considering the various aspects of what you need to do so you know what direction to take in each area.

Write what fits your business, goals, needs, and marketing direction. It can start off small and grow as your business grows.

3. Essentially Useless

The purpose of the writing is to create an operational roadmap for your business. If it's not usable, the plan hasn't been well prepared. In fact, it should be pulled out on a daily basis to chart your business operations.

Some reasons why the document may not be usable could include using a template that doesn't make sense for your business. Instead of being specifically for your operations a template made for another industry of business might be used that creates information or sections that are irrelevant to your business. Trying to fill these in can be so tedious that the writer just puts the plan away and moves on.

Another reason for rendering a plan useless are unrealistic financial projections. By giving false financial numbers it can be frustrating to see that the reality doesn't produce the expected outcomes. As a result the plan is deemed useless.

The key to this is to work with conservative information in the business plan and be totally realistic about your business and its potential situation.

Writing the Business plan is the best thing an entrepreneur can do. Be aware that many myths have been created about business plans by people that don't really understand them. Work with a professional that knows the business plan and put your business in order to sustainable success.

Blog Post Courtesy of Consuelo Meux, Business Adviser.

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