Something like nine out of ten startup businesses fail. Right off the bat, if you’re starting a new business, you have a 90% chance of failure. With that staggering percentage, you need to do everything you can to be in that 10%.

Many businesses that fail never had a business plan. Many entrepreneurs think they have a plan, but haven’t written it down. “It’s all in my head,” they’ll say.

Alternatively, they may argue that their plan is so simple they don’t need to write it down. Their plan may be something like this:

1) Create product.
2) Promote product.

That’s it! That’s their plan!

Unfortunately, that’s not much of a plan. Online entrepreneurs are sometimes even worse. Since they are operating in the virtual world, they feel that cuts them some slack. Things change too fast online, they argue. They can’t write down a plan, because they have to be ready to change directions at a moment’s notice!

But, just because you commit a plan to paper (or even to an electronic document!) doesn’t mean that you cannot adapt and change it later on. You’re not tied to that plan anymore than you have to be.

But, having a plan does give you a roadmap and a direction to go. Let’s say you’re out for a Sunday drive. You head out and go. At some point, something catches your interest, and you decide to turn and go there. And so on, until later in the day, you decide it’s time to go home and head back. You had a fun and enjoyable day.

That’s how many people run their businesses. They like to have fun and enjoy themselves, which is okay. There’s nothing wrong with that! But, with a business, you need to have a clearer direction. You can still enjoy the drive, but you have to take certain roads and make specific turns in order to reach your destination.

Say, for example, you want to attend a friend’s party. You’ve never been to her home before. You’ve never even been to her town. How do you get there? Do you just head out and hope for the best? Or, would you ask for directions and a map? Maybe you’d use a GPS?

A business is no different. Maybe your goal with your business is to make a little extra money on the side, while still keeping your current job. Maybe you want your new business to be your new full-time job so you can quit what you’re doing now. Perhaps you want to earn enough money to buy a new house, a new car, put the kids through college. Or, maybe you want to be the best business of your type in town? Or in your state? Or even the country, or the world?

Whatever it is you want, you need to find a way to get there. You need to have a road map. That’s where your business plan comes in.

Let’s revisit your friend’s party. When you ask her for directions, do you write them down? Will you take a map with you too? Or do you just hope you’ll remember the directions? If you don’t write them down, even if they’re easy, what happens if you forget? You may have the best memory, but something may come up that throws you a curve. Imagine you remembered to turn right after Maple Street, left after Palm Drive and another right on Sequoia Parkway. But, when you get to Maple Street, there is construction and you have to detour to a right onto Pine Street. Now what?

With directions and a map, you could quickly find your way back to where you need to be. You may even find a quicker or more direct route to your friend’s home. Without the map and directions, you’ll be driving around looking for a familiar street. Maybe you’ll find Palm Drive. But, now which way do you go? You may find your way to Sequoia Parkway, or you may head off into the opposite direction. Maybe you’ll think you’re heading in the wrong direction and turn around only to discover you were going in the right direction to begin with but hadn’t gone far enough.

You see, it doesn’t matter how good your memory is. It doesn’t matter how simple your plan may be. What matters is that putting it down on paper forces you to draw out the road map for the success of your business. Your destination is your goal and your business plan is your road map!

Once you have it down on paper (or electronically), you have something to reference when a curveball comes your way. You’ll save time by not heading off into the wrong direction.

Let’s revisit the earlier example. Here was the mental business plan:

1) Create product.
2) Promote product.

Now, let’s update that with your friend’s party as an example.

1) Buy gift.
2) Go to friend’s house.

You see what you’re missing there? You know you have to go to your friend’s house, but how do you get there? Likewise, you may know you need to promote your product, but how will you do that? You might come up with a bunch of ideas, but will you remember them all? How much time each day will you set aside for a specific promotional method?

What if Google AdWords is the best way to promote your particular online business? And, social networking is a good, but secondary method? If you don’t write down your plan, you risk spending more time each day social networking while neglecting your AdWords’ campaigns, which would be to the detriment of your business! What was your business goal again? Was it a new house? Money for college? Or, was it installing a bunch of new widgets on your blog? It is easy to get sidetracked when you don’t have a written plan.

Do yourself a favor. Write down your business plan! Write down the steps you intend to follow to ensure the success of your business! Don’t rely on memory! Don’t rely on “it’s all in my head!” Write it down!

You’ll thank yourself later, when you’re driving that new car or relaxing on the back porch of your new home.

This entry was posted on Sunday, July 20th, 2008 at 6:50 pm and is filed under Time Savers. You can follow any responses to this entry through the RSS 2.0 feed.
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