Should You Write Your Own Business Plan?If you are just starting a company and looking for funding, or looking for additional funding for growth, you will need to develop a traditional business plan. Creating a business plan is a business hurdle that entrepreneurs seem to dread. Do you do it yourself? Do you hire someone to do it? How do you get it done quickly, but without spending too much money on it? Will what you do yourself be adequate to get funding?
In this article I will discuss
pros and cons of do-it-yourself business planning versus having a business planning consultant do it for you or with you.
The Do It Yourself Business Plan
Particularly if you are seeking capital of less than $200,000, consider creating plan yourself after taking a class or reading some books or getting some coaching for someone who has written successful business plans.
Consider taking a three-hour business planning class through SCORE or local Small Business Development Center. Even if you decide afterwards not to write your own plan, you will have a much better idea of what you want out of process and what to expect.
There are some good reasons for an entrepreneur to do business plan:
•First of all, because you can. If you’ve read sample business plans and find their accounting jargon intimidating, you are not alone. But as long as you can clearly get your message across and have other people such as you accountant look at plan before it goes to lenders or others, you can do this work yourself.
•It is in learning business planning process that you develop analytical thinking skills necessary to run your business with an intimate understanding of your own business model. Going through planning process is an invaluable business experience. •You need to know plan inside and out and really understand variables involved. You are one who will be asked tough questions by potential investors or lenders, such as “What will you do if only half your expected revenue comes in?” or “What will you do if you find out that direct mail is not working for you as your primary marketing tool?”
Outsourcing Business Plan Process
Entrepreneurs are fire fighters. One of most important jobs of an entrepreneur is to manage time, and do those things that you are best skilled to do. Many entrepreneurs decide to hire someone else to do their business plans, often because they have an urgent need for funding and can’t afford learning curve to be able to develop a high-quality plan that will meet needs of lenders or investors.
In addition, if your funding requirements are more than $500,000 my recommendation is to get some professional help with this project, even if you do some of it yourself.
Some reasons to consider hiring a consultant:
•It will get done! Business planning is done much faster with someone who knows process. Every entrepreneur has good intentions about getting plans completed, but months later they still haven’t done all work. Planning should be high priority work, but it is hard to get to when customer calls and employee problems require immediate attention. The sooner plan is completed, sooner funding can be attained. And price of hiring consultant will be small in comparison with increases in growth and profitability of business. •It will get done in a way financial professionals will respect. Business planning is done better by someone who knows how finance people look at plans and what they will and won’t question. Once you’ve been through business plan process many times, you know what it takes to get funding - what to emphasize and what to play down. •The consultant’s objectivity will allow for non-emotionally-based projections and expectations for business. A consultant will be much more objective in process and question your assumptions, making it less likely that business will have problems after funding comes in.
No matter what, don’t let a business planning consultant talk you into putting any information into your plan that you aren’t comfortable with. If it doesn’t look right to you, it probably isn’t. It is your business, and you will be stuck with plan long after you’ve paid consultant’s bill. Make sure it is plan that you want, one that matches your goals and objectives, and captures way you look at business and spirit of your company.
If you do decide to hire a business planning consultant, here are some of important questions to ask to make sure you get greatest value from your investment:
1.How many business plans have you written for my type of business? How many of them were funded? 2.How much time will you need of mine during planning process? 3.When will plan be completed, and how many drafts should I expect to see and have opportunity to comment on? 4.Will you be writing plan yourself or do you have associates who do work with you? 5.Will there be an opportunity for you to present plan or for me to present plan to my other advisors before final draft is done? 6.How do you work in collaboration with my partners and advisors so their input is taken into consideration during writing of plan? 7.Do you do market research and financial spreadsheets, or are those things done separately (and charged for separately)? 8.Does your price include revisions or customization for certain types of funding (to include different information needed by investors versus lenders)? 9.Does your price include coaching to prepare me to talk with lenders or make financing presentations? 10.Will I have an electronic version as well as a hard copy version of final plan (so I can make changes later if I need to)?
