| If you are just starting a company and looking for | | | | type of business? How many of them were funded? |
| funding, or looking for additional funding for growth, you | | | | - How much time will you need of mine during the |
| will need to develop a traditional business plan. Creating | | | | planning process? |
| a business plan is a business hurdle that entrepreneurs | | | | - When will the plan be completed, and how many |
| seem to dread. Do you do it yourself? Do you hire | | | | drafts should I expect to see and have the opportunity |
| someone to do it? How do you get it done quickly, but | | | | to comment on? |
| without spending too much money on it? Will what you | | | | - Will you be writing the plan yourself or do you have |
| do yourself be adequate to get funding? | | | | associates who do the work with you? |
| In this article I will discuss the pros and cons of | | | | - Will there be an opportunity for you to present the |
| do-it-yourself business planning versus having a | | | | plan or for me to present the plan to my other |
| business planning consultant do it for you or with you. | | | | advisors before the final draft is done? |
| The Do It Yourself Business Plan | | | | - How do you work in collaboration with my partners |
| Particularly if you are seeking capital of less than | | | | and advisors so their input is taken into consideration |
| $200,000, consider creating the plan yourself after | | | | during the writing of the plan? |
| taking a class or reading some books or getting some | | | | - Do you do the market research and the financial |
| coaching for someone who has written successful | | | | spreadsheets, or are those things done separately |
| business plans. | | | | (and charged for separately)? |
| Consider taking a three-hour business planning class | | | | - Does your price include revisions or customization for |
| through SCORE or the local Small Business | | | | certain types of funding (to include different information |
| Development Center. Even if you decide afterwards | | | | needed by investors versus lenders)? |
| not to write your own plan, you will have a much | | | | - Does your price include coaching to prepare me to |
| better idea of what you want out of the process and | | | | talk with lenders or make financing presentations? |
| what to expect. | | | | - Will I have an electronic version as well as a hard |
| There are some good reasons for an entrepreneur to | | | | copy version of the final plan (so I can make changes |
| do the business plan: | | | | later if I need to)? |
| First of all, because you can. If you've read sample | | | | The Optimum Solution: A Blended Approach |
| business plans and find their accounting jargon | | | | At best, the planning process should not be at either |
| intimidating, you are not alone. But as long as you can | | | | end of the spectrum, but squarely in the middle. In my |
| clearly get your message across and have other | | | | experience, plans that win funding come from a true |
| people such as you accountant look at the plan before | | | | collaboration between a skilled consultant/facilitator and |
| it goes to lenders or others, you can do this work | | | | the entrepreneur's team of employees and advisors. |
| yourself. | | | | A business planning consultant can act as a coach, |
| It is in learning the business planning process that you | | | | first assessing the job to be done, and then |
| develop analytical thinking skills necessary to run your | | | | recommending who is best to do it. The business plan |
| business with an intimate understanding of your own | | | | should be a compilation of work between the vision |
| business model. Going through the planning process is | | | | and goals of the entrepreneur, the technical |
| an invaluable business experience. | | | | understanding and expertise of his or her accountant |
| You need to know the plan inside and out and really | | | | and other professionals, a consensus of employees or |
| understand the variables involved. You are the one | | | | others, and the research and writing abilities of the |
| who will be asked the tough questions by potential | | | | business planning consultant. The consultant should |
| investors or lenders, such as "What will you do if only | | | | meet with all parties involved, talk about what is |
| half your expected revenue comes in?" or "What will | | | | needed for the plan, and use all the resources available |
| you do if you find out that direct mail is not working for | | | | to get the work done as quickly and cost effectively |
| you as your primary marketing tool?" | | | | as possible. It is the consultant's responsibility in the |
| Outsourcing the Business Plan Process | | | | process to take all the pieces and make the final plan |
| Entrepreneurs are fire fighters. One of the most | | | | into a readable, accessible document that will stand up |
| important jobs of an entrepreneur is to manage time, | | | | to investor/lender scrutiny. |
| and do those things that you are best skilled to do. | | | | My final caveats: |
| Many entrepreneurs decide to hire someone else to | | | | Don't pay more than a few thousand dollars for a plan |
| do their business plans, often because they have an | | | | unless you are looking for capital of well over $1 million. |
| urgent need for the funding and can't afford the | | | | I have heard more than a few horror stories by people |
| learning curve to be able to develop a high-quality plan | | | | who have hired university professors assuming they |
| that will meet the needs of lenders or investors. | | | | are the experts (they aren't) and paying tens of |
| In addition, if your funding requirements are more than | | | | thousand of dollars for a poorly written or incomplete |
| $500,000 my recommendation is to get some | | | | plan. Ask your banker for business planning consultant |
| professional help with this project, even if you do some | | | | recommendations, or better yet, talk with someone |
| of it yourself. | | | | who had a good experience having a business plan |
| Some reasons to consider hiring a consultant: | | | | written for them. It is reasonable for a consultant to |
| - It will get done! Business planning is done much faster | | | | expect you to pay half of the fee up front and the |
| with someone who knows the process. Every | | | | other half at the completion of the plan. And you can't |
| entrepreneur has good intentions about getting plans | | | | hold the consultant responsible if you don't get funding |
| completed, but months later they still haven't done all | | | | based on the plan - too much is based on your own |
| the work. Planning should be high priority work, but it is | | | | credit and management skills. |
| hard to get to when customer calls and employee | | | | Don't expect to get a finished plan that is a roadmap |
| problems require immediate attention. The sooner the | | | | of everything you need to do to have a successful |
| plan is completed, the sooner funding can be attained. | | | | business. That isn't the purpose of the business |
| And the price of hiring the consultant will be small in | | | | planning process. A traditional business plan is intended |
| comparison with the increases in growth and | | | | only to document your strategies for the business very |
| profitability of the business. | | | | briefly - but well enough to get funding. If you are |
| - It will get done in a way financial professionals will | | | | hoping for something that will tell you how to market or |
| respect. Business planning is done better by someone | | | | how many people you need to hire, you will have to |
| who knows how finance people look at plans and | | | | start with a deep strategic planning process, and |
| what they will and won't question. Once you've been | | | | probably buy lots of consulting time to get you going. |
| through the business plan process many times, you | | | | Don't expect a great a business plan from a poor |
| know what it takes to get funding - what to | | | | business model. If your costs are too high to make |
| emphasize and what to play down. | | | | your business profitable, the business planning process |
| - The consultant's objectivity will allow for | | | | will help you discover that. Then it will be up to you to |
| non-emotionally-based projections and expectations | | | | make the hard decisions about changing your costs |
| for the business. A consultant will be much more | | | | structure to make the business work. The business |
| objective in the process and question your | | | | planning consultant is a skilled professional, not a |
| assumptions, making it less likely that the business will | | | | miracle worker. A good business plan can help you |
| have problems after the funding comes in. | | | | highlight your strengths and minimize your weaknesses, |
| No matter what, don't let a business planning consultant | | | | but it cannot make an unworkable business model into |
| talk you into putting any information into your plan that | | | | a thriving business. |
| you aren't comfortable with. If it doesn't look right to | | | | And one final thought: Don't go on to start a business |
| you, it probably isn't. It is your business, and you will be | | | | or make changes in your current business if everything |
| stuck with the plan long after you've paid the | | | | in the business planning process tells you it won't work. |
| consultant's bill. Make sure it is the plan that you want, | | | | Things don't get better out in the real world if they |
| one that matches your goals and objectives, and | | | | don't work on paper. Deal with the weaknesses - get |
| captures the way you look at business and the spirit | | | | more training, consider product redevelopment, or have |
| of your company. | | | | a home-based business to reduce costs until you can |
| If you do decide to hire a business planning consultant, | | | | sustain the rent for an office. Businesses fail finally |
| here are some of the important questions to ask to | | | | because they've run out of money. If your plan tells |
| make sure you get the greatest value from your | | | | you that you can't make enough money to make the |
| investment: | | | | business work for the long run, pay attention to that |
| - How many business plans have you written for my | | | | reality. |