To me a small business is one of the best things you can have if you enjoy operating a business; however, it does require a lot more than just enjoying ownership and running a business. Especially if you are starting a small business and even if you have had a business for many years, you should know what you want for your future. Never guess about your business. You see, without a plan, you are just guessing. We business people work hard and we always continue to hope for the best but when we guess, we're taking a lot of risks. You've probably heard the old saying from an unknown author that says, "If you fail to plan, then plan to fail." As a matter of fact, did you know that the Small Business Administration says that 50% of small business owners will fail sometime during their first 5 years? There are lots of reasons but one big one is that owners don't have a plan. Another is they have picked a product or service that doesn't have a big enough market to sustain their business and sometime during their future they will run out of customers.
Business Plans are Guesswork _ Almost everything you write in your business plan will be guesswork. Even worse, there'll be some pretty inflated and optimistic claims in there that won't reflect reality at all. Here's some reasons why you're going to be doing a lot of guessing: You don't really know how many widgets you're going to sell until you try to sell some. You don't know what price point to use until you test to see what your market will accept. You don't know whether your customer even wants your product/service until you find a market and ask them. You don't know how to market your business until you try various methods, split test and see what works. You don't know how new tools like Twitter might transform you business, if they aren't yet invented when you write your five year plan. So we've established that a business plan is largely a work of fiction. What other reasons are there not to write one? They Give You a False Sense of Security _ I don't mind admitting I've written business plans in the past for some pretty bad ideas. Yet, I managed to make the business sound really viable, enough to fool even myself. This is a dangerous thing to do because having a plan in place which looks great can give you a false sense of security. With all the guesswork involved you'll have a free rein to make your plan reflect what you want to happen, rather than what is likely to happen. This can lead you to think you have a great idea when maybe you don't. If you use your plan to convince other people it's a great idea then the problem can escalate. Now those you seek approval from also think it sounds like a good idea, all based on fiction. Those who have read anything I've written before will already know that I believe guesswork doesn't contribute to a good business mindset and should be avoided whenever possible. It's best to just take action, try it out on a small scale with minimal cost and you'll know very quickly whether it's a good idea or a terrible idea. Writing a plan doesn't make your idea any better, it jut makes it sound better.