Should you write your own business plan


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Business plan financial projections seem daunting because they are so uncertain. Doing financial projections for your business plan should not be a nightmare! Get great insights on Business Plan Financial Projections and Business Planning for Recession Survival and Recovery

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Should you write your own business plan

  1. 1. ==== ====Great insight on strategic business plan development and entrepreneurship. Access business plantemplates, business plan examples, business plan videos and much ====If you are just starting a company and looking for funding, or looking for additional funding forgrowth, you will need to develop a traditional business plan. Creating a business plan is abusiness hurdle that entrepreneurs seem to dread. Do you do it yourself? Do you hire someoneto do it? How do you get it done quickly, but without spending too much money on it? Will whatyou do yourself be adequate to get funding?In this article I will discuss the pros and cons of do-it-yourself business planning versus having abusiness planning consultant do it for you or with you.The Do It Yourself Business PlanParticularly if you are seeking capital of less than $200,000, consider creating the plan yourselfafter taking a class or reading some books or getting some coaching for someone who haswritten successful business plans.Consider taking a three-hour business planning class through SCORE or the local Small BusinessDevelopment Center. Even if you decide afterwards not to write your own plan, you will have amuch better idea of what you want out of the process and what to expect.There are some good reasons for an entrepreneur to do the business plan:First of all, because you can. If youve read sample business plans and find their accountingjargon intimidating, you are not alone. But as long as you can clearly get your message acrossand have other people such as you accountant look at the plan before it goes to lenders orothers, you can do this work yourself.It is in learning the business planning process that you develop analytical thinking skills necessaryto run your business with an intimate understanding of your own business model. Going throughthe planning process is an invaluable business experience.You need to know the plan inside and out and really understand the variables involved. You are
  2. 2. the one who will be asked the tough questions by potential investors or lenders, such as "Whatwill you do if only half your expected revenue comes in?" or "What will you do if you find out thatdirect mail is not working for you as your primary marketing tool?"Outsourcing the Business Plan ProcessEntrepreneurs are fire fighters. One of the most important jobs of an entrepreneur is to managetime, and do those things that you are best skilled to do. Many entrepreneurs decide to hiresomeone else to do their business plans, often because they have an urgent need for the fundingand cant afford the learning curve to be able to develop a high-quality plan that will meet theneeds of lenders or investors.In addition, if your funding requirements are more than $500,000 my recommendation is to getsome 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 the process.Every entrepreneur has good intentions about getting plans completed, but months later they stillhavent done all the work. Planning should be high priority work, but it is hard to get to whencustomer calls and employee problems require immediate attention. The sooner the plan iscompleted, the sooner funding can be attained. And the price of hiring the consultant will besmall in comparison with the increases in growth and profitability of the business.It will get done in a way financial professionals will respect. Business planning is done better bysomeone who knows how finance people look at plans and what they will and wont question.Once youve been through the business plan process many times, you know what it takes to getfunding - what to emphasize and what to play down.The consultants objectivity will allow for non-emotionally-based projections and expectations forthe business. A consultant will be much more objective in the process and question yourassumptions, making it less likely that the business will have problems after the funding comesin.No matter what, dont let a business planning consultant talk you into putting any information into
  3. 3. your plan that you arent comfortable with. If it doesnt look right to you, it probably isnt. It isyour business, and you will be stuck with the plan long after youve paid the consultants bill.Make sure it is the plan that you want, one that matches your goals and objectives, and capturesthe way you look at business and the spirit of your company.If you do decide to hire a business planning consultant, here are some of the important questionsto ask to make sure you get the greatest value from your investment:How many business plans have you written for my type of business? How many of them werefunded?How much time will you need of mine during the planning process?When will the plan be completed, and how many drafts should I expect to see and have theopportunity to comment on?Will you be writing the plan yourself or do you have associates who do the work with you?Will there be an opportunity for you to present the plan or for me to present the plan to my otheradvisors before the final draft is done?How do you work in collaboration with my partners and advisors so their input is taken intoconsideration during the writing of the plan?Do you do the market research and the financial spreadsheets, or are those things doneseparately (and charged for separately)?
  4. 4. Does your price include revisions or customization for certain types of funding (to include differentinformation needed by investors versus lenders)?Does your price include coaching to prepare me to talk with lenders or make financingpresentations?Will I have an electronic version as well as a hard copy version of the final plan (so I can makechanges later if I need to)?The Optimum Solution: A Blended ApproachAt best, the planning process should not be at either end of the spectrum, but squarely in themiddle. In my experience, plans that win funding come from a true collaboration between askilled consultant/facilitator and the entrepreneurs team of employees and advisors.A business planning consultant can act as a coach, first assessing the job to be done, and thenrecommending who is best to do it. The business plan should be a compilation of work betweenthe vision and goals of the entrepreneur, the technical understanding and expertise of his or heraccountant and other professionals, a consensus of employees or others, and the research andwriting abilities of the business planning consultant. The consultant should meet with all partiesinvolved, talk about what is needed for the plan, and use all the resources available to get thework done as quickly and cost effectively as possible. It is the consultants responsibility in theprocess to take all the pieces and make the final plan into a readable, accessible document thatwill stand up to investor/lender scrutiny.My final caveats:Dont pay more than a few thousand dollars for a plan unless you are looking for capital of wellover $1 million. I have heard more than a few horror stories by people who have hired universityprofessors assuming they are the experts (they arent) and paying tens of thousand of dollars fora poorly written or incomplete plan. Ask your banker for business planning consultantrecommendations, or better yet, talk with someone who had a good experience having abusiness plan written for them. It is reasonable for a consultant to expect you to pay half of thefee up front and the other half at the completion of the plan. And you cant hold the consultantresponsible if you dont get funding based on the plan - too much is based on your own credit andmanagement skills.
  5. 5. Dont expect to get a finished plan that is a roadmap of everything you need to do to have asuccessful business. That isnt the purpose of the business planning process. A traditionalbusiness plan is intended only to document your strategies for the business very briefly - but wellenough to get funding. If you are hoping for something that will tell you how to market or howmany people you need to hire, you will have to start with a deep strategic planning process, andprobably buy lots of consulting time to get you going.Dont expect a great a business plan from a poor business model. If your costs are too high tomake your business profitable, the business planning process will help you discover that. Then itwill be up to you to make the hard decisions about changing your costs structure to make thebusiness work. The business planning consultant is a skilled professional, not a miracle worker.A good business plan can help you highlight your strengths and minimize your weaknesses, but itcannot make an unworkable business model into a thriving business.And one final thought: Dont go on to start a business or make changes in your current businessif everything in the business planning process tells you it wont work. Things dont get better outin the real world if they dont work on paper. Deal with the weaknesses - get more training,consider product redevelopment, or have a home-based business to reduce costs until you cansustain the rent for an office. Businesses fail finally because theyve run out of money. If yourplan tells you that you cant make enough money to make the business work for the long run, payattention to that reality.About The AuthorJan B. King is the former President & CEO of Merritt Publishing, a top 50 woman-owned and runbusiness in Los Angeles and the author of Business Plans to Game Plans: A Practical System forTurning Strategies into Action (John Wiley & Sons, 2004). She has helped hundreds of businesseswith her book and her ebooks, The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself Game Plan Workbook. See for more information.jan@janbking.comArticle Source:
  6. 6. ==== ====Great insight on strategic business plan development and entrepreneurship. Access business plantemplates, business plan examples, business plan videos and much ====