Top 10 Business Plan Myths of Solo Entrepreneurs

A recent study of 29,000 business startups noted that 26,000 of them failed. Of those failures, 67% had no written business plan. Think that's a coincidence?

Here's the top 10 myths Solo 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 solo business, can actually be easy and fun--and can jumpstart 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 in a foreign country without a map. You might have a lot of fun along the way, and meet a lot of friends, 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.

Solo Entrepreneur Reality: Successful Solo Entrepreneurs know that the exercise of creating a plan for their business really helps them think through all the critical aspects of running a business, make better business decisions, and get to profitability sooner.

2. Myth: 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.

Solo Entrepreneur Reality: Software can be helpful-but it's not required. Software is more likely to help if you have a more traditional type business, like a restaurant or a typical consulting business.

3. Myth: I need to hire a consultant to write my business plan.

Consultants are expensive and don't really know as much about your business as you do!

Solo Entrepreneur 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.

4. Myth: The business plan templates I've seen have all these complex-sounding sections to them-I guess I need all those?

The only time you need to follow a specific outline is if you are looking for funding.

Solo Entrepreneur Reality: Your business plan needs to answer ten basic questions-that's it! Don't make things more complicated than necessary.

5. Myth: My business plan needs to be perfect before I can start my business.

If you wait for everything to be perfectly detailed, you may never start.

Solo Entrepreneur Reality: If you have at least a first draft that answers those ten basic questions, you are ready to launch your business! Make your business plan a living, evolving document. In the startup stages, review and update your plan every 2-3 months. As you grow and stabilize, you can slow down the review cycle to every 6-12 months. All business plans should be reviewed and updated at least once a year.

6. Myth: I have to do everything I say I'm going to do in my business plan, or I'm a failure.

Many Solo 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!

Solo Entrepreneur Reality: Think of your business plan as a roadmap for a trip. Expect to take some detours for road construction. Be flexible enough to take some exciting, unplanned side trips. And don't be surprised if instead of visiting Mount Rushmore, you decide to go to Yellowstone, if that turns out to meet your vacation goals better!

7. Myth: 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.

Solo Entrepreneur Reality: As a Solo Entrepreneur, your business plan need only satisfy YOU. It might be scribbled on a napkin, on stickie notes on your wall, or consist of a collage of pictures and captions. It might be all in one document or scattered among several mediums. As long as you know it in your head and heart without having to look at it, and and it is easily accessible to you when you have doubts, that's all that is necessary.

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 the stock of some company without seeing a prospectus?

Solo Entrepreneur 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 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.

9. Myth: 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 I don't write it down!

Solo Entrepreneur 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, it's 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.

10. Myth: 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.

Solo Entrepreneur 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!

Terri Zwierzynski is a self-employed business strategist and marketing consultant to solo entrepreneurs, and a grassroots promoter of the solo entrepreneur lifestyle. She runs Solo-E.com, the resource website for the self-employed which attracts thousands of solo home business owners monthly from over 100 countries on six continents (and was recently named a finalist for "Website of the Year" in the 4th Annual Stevie® Awards for Women in Business).

Find more articles about Business Planning at Solo-E.com, plus get a copy of our new ebook, "25 Surefire Ways to Capture More Clients, Get More Done in Less Time, and Make More Money -- in 90 Days or Less."

How Home-Based Business Entrepreneurs Think

Too many people are trying to start their home businesses with an ordinary employee's way of thinking. This has become a common reason why not long after sitting down and giving it a fair look into even the most lucrative business opportunity they bump into, they put it away and decide not to take any chances.

What has happened here is that the most lucrative business opportunity has been looked into by an ordinary 9-to-5-worker, who appears NOT to be business-minded.

If you are like most people, you have probably considered starting your own business yourself. But above all, you have to understand that to make into a successful Business Entrepreneur, one has to change their way of thinking first.

1. DO NOT EXPECT FAST CASH!

Besides gambling or winning a lottery, working as an employee is the only way to get 'fast' cash... 'fast' as in 'in-25-working-days'. This kind of cash is always certain to come in as long as you work from 9 to 5 for your boss. But as you probably already know it, as soon as you stop, the money stops. (See FinancialFreedomAwaits.com).

True entrepreneurship-minded people know that it takes time to develop an 'attack plan' for their businesses. It takes time to build a strong and solid business, which delivers ongoing income through many years.

True Business Entrepreneurs hold on to this truth, "We reap what we sow, but the harvest is never in the same season as the planting."

Change your way of thinking:

DO NOT EXPECT FAST CASH!

2. AIM FOR JOB SECURITY OR FINANCIAL SECURITY?
Employees would rather have job-security. Why? Simple: the income is secure. As long as you loyally work from 9 to 5, you will for certain get your cash! The problem with a typical job is that when you stop, the money stops.

The stark fact is: one day you might get sick and won't be able to go back to work. Sooner or later you will retire. Companies get broke and have to release their employees. No matter what the situation, as soon as you stop working, the money will stop coming.

So much for secure income...!

A job with secure income is necessary for those who has not set up their own business yet. True. But a true Business Entrepreneur won't settle merely for job-security. He aims for much more, such as financial security. No, he won't have fast cash. And no, he won't have any secure income yet - at least not in the beginning. And often, he won't have any income at all from his new business for the first few months.

Business entrepreneurs think of the big picture. What they do is building assets from which his money will come in month after month, year after year from work he is doing now! The money will not come now. It might not even come for the next few months. But as soon as his business is up and running, it will keep generating income for him, even when he chooses to stop working!

And THAT is financial security!

Change your way of thinking:

THINK OF THE BIG PICTURE: AIM FOR FINANCIAL SECURITY!

3. GENERATE PASSIVE INCOME

Financial freedom is not measured by how much money you earn by working, but how much money comes in with only little or no work at all. This later kind of income is called passive income. This fact has been known for decades by real wealthy people.

Successful and wealthy entrepreneurs do only little work and sometimes it is even possible to do the work only once but still generate recurring income on it. Imagine a song or a book writer. They write their songs or books once but get paid forever on it. This do-it-once-get-paid-forever type of income is called residual income.

Most people who have attained financial freedom have other people working to generate income for them. Earning money by other people's effort is called leveraged income.

As hard as it may seem, to create leveraged income, you need to have your own business where other people work to generate income for you. Any business. Whether it is a traditional business, franchise, small business, internet based or home based.

Employees work to generate secure income. Business Entrepreneurs work to build assets with income streams which generates for him ongoing passive income (either residual or leverage income or both). In other words Business Entrepreneurs work to build himself -what I would call- a 'money-machine' which is designed to generate ongoing income.

Whereas the Employee can not stop working because otherwise he will lose his income, the Business Entrepreneur will have money coming in constantly, even when he chooses not to work, simply because it is his assets that generate residual and leverage income for him.

Change your way of thinking:
TAP INTO PASSIVE INCOME BY GENERATING RESIDUAL & LEVERAGED INCOME!

4. INVESTMENTS

It is common for people who seek job security to hesitate to invest. The reason is understandable: for some of us the risks of investing in a business are just too much to handle.

A true Business Entrepreneur understands that in order to build -what I would call- a 'money-machine', investments are necessary. There is just no such things as businesses without investments. He knows that it takes time and effort to develop a successful business. But he also knows that investing money is just as important!

Sometimes it takes the Business Entrepreneur a year or two before he can finally reap the big success. Sometimes even a bit more. It takes a couple of years of investing time, effort and money. But this is not too hard for him to handle. A true Entrepreneur thinks long term. He knows that in the end, his working and money investing will finally pay off!

A Home Based Business Entrepreneur would only have to invest just 5-10 hours a week for a couple of years and he would only have to make low budget investments into his home based business. And at the end of the time of working and investing, our Entrepreneur would have turned it into a significant amount of residual income stream!

I'm not talking about money that comes in today and is gone tomorrow but income that keeps coming in month after month, year after year... money that -as Gery Carson has put it- "when you've left this planet continues to provide for your spouse, children, or grandchildren."

By then you would think that all your valuable time and money you have spent would be worth it.

Commonly an ordinary employee, who fears too much to invest, works hard to receive his pay check every month. Most likely he even retires broke. Before he knows it, he leaves the planet with nothing to leave for his family.

A true Business Entrepreneur is prepared to invest. He knows by investing in his business he is building assets that would generate passive and residual income for him throughout his years on this planet and the years of his grandchildren.

Change your way of thinking: THINK LONG TERM: START INVESTING!