Myth: All entrepreneurs need a formal business plan

There’s no one path to success

When it comes to entrepreneurial success stories, some business owners would have the public believe there is only one route to achieving ideal results. Indeed, the Internet is populated with articles written by experts who tout their anecdotal experience as the singular path to success, leading to the perpetuation of certain professional myths.

Contrary to popular belief, you don’t have to get up at 5 a.m. to be a functional entrepreneur—nor are you required to create “formal business plan” with specific sections in a particular order. A business plan based on the unique characteristics of the opportunity and the founder(s) can effectively replace a template driven business plan.

The ubiquity of the formal business plan myth

Most would-be entrepreneurs believe that the first step to starting a business is to create a business plan, which is correct. However, they also believe that a business plan’s components have been defined somewhere by business geniuses, and that they will be mocked if theirs doesn’t look like everyone else’s, which is completely incorrect.

But if a specifically structured business plan is unnecessary, why is the myth that suggests otherwise so widespread?

A quick Google search for the phrase “business plan template” (which is searched for over 4,000 times per month) returns over 10 million results, emblazoned with results from SCORE.org and SBA.gov that support the impression that these templates are necessary to the startup process. Many of these sites contain downloadable templates for entrepreneurs to complete, and the concreteness of these documents make it easy for people to feel safe inside of their structure.

The myth’s problematic nature

It’s true that a formal business plan may be beneficial in some cases. However, the plan’s implementation causes issues as soon as it starts hampering entrepreneurial creativity. In fact, the idea that a plan must look a certain way or maintain a certain order can actually be harmful to the business’s evolution in the long run. Realistically speaking, your carefully researched 10-part plan will probably be thrown out the moment you encounter the first curveball, anyway.

A motivated entrepreneur with a competitive analysis founded in SWOT or Porter’s Five Forces, a defensible forecast of financials and a thorough definition of the targeted customer has at least as good of a chance for success as a startup that filled in the blanks on a business plan template.

Final verdict: Choose what works for you

Ultimately, the business plan format is a decision each entrepreneur must decide. Some people need the structure of a business plan template to help them think through their new venture, but smart entrepreneurs will understand that those plans aren’t templates for success – they are merely suggestions.

Even the sites that offer business plan templates suggest this very this very thing. For example, SCORE.org’s business plan template for startups states, “The real value of creating a business plan is not in having the finished product in hand; rather, the value lies in the process of researching and thinking about your business in a systematic way.”

As your research unearths challenges and opportunities critical to your business, don’t let a template dictate your strategy. Keep in mind that effective business strategy should remain fluid, rather than ruling out opportunities for innovation in order to adhere to a strict set of guidelines.

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