Why do many “solopreneurs” who are starting a home business neglect creating a business plan?
After all, business planning is considered an essential success factor for any business venture. You’ve heard all the clichés such as:
- Failing to plan is planning to fail.
- If you don’t know where you’re going, any road will take you there.
So why do so many home business entrepreneurs fail to do it?
Perhaps it's the lack of a perceived need. Many just don’t think they need one. They’re too busy doing to be bothered with planning.
Or maybe it's because many business planning models don’t fit the solopreneur. The traditional models are developed around the idea that you are going to take it to the bank to support your application for a business loan. These models are a bit overwhelming for the average home business professional.
So why do a business plan?
I think the number one reason for anyone starting a home business to do a business plan is to organize thoughts and crystalize thinking about the business.
And it doesn’t have to be complicated but it does need to be thoughtful and honest.
Copyblogger came up with a model that I like. Aptly enough it is called A Remarkably Simple Business Plan.
It is well suited for the solopreneur starting a home business by posing the right questions. Answer these questions and you’ll have your business plan.
- Who’s my ideal customer?
- How will they find me?
- What’s my end product that I will deliver to my customer?
- What high priority problem does it solve for my customer?
- Is there any way to demonstrate that my product is a viable solution?
- Who else or what else will I need to pull this off?
- How will they be compensated?
- Where will I go for moral support, a sounding board, and accountability?
- How do I make money?
- Are there other related products I could sell to my customer?
- What are the costs and how will I cover them?
- What needs to be done and who will do it?
- How will I measure success?
- What could go wrong?
- What actions are necessary now to get started?
Even though this is a relatively simple business plan, it’s a bit overwhelming isn’t it?
Beware of Green's Law When Business Planning
There is a risk associated with detailed planning. You may talk yourself out of doing it.
I once worked with a guy named Sid Green who called this phenomenon Green’s Law. He theorized that a carefully thought-out project might never be attempted if all the risks, costs and pitfalls are exposed up front. Too much advance knowledge can cause the decision makers to get “cold feet.”
On the other hand, planning and assessing risks make good business sense. Some businesses and some projects should never be launched. It’s better to know sooner than to find out later. By the same token, opportunities may be lost by the faint-hearted unwilling to take risks.
Your business plan enables you to make informed decisions about the course of your business.