Every new business owner knows that a business plan is critical – it is drilled into them by potential investors and every banking officer they meet. So why is something that is so important to the launch of a new venture so difficult to write? Good question! In this article I will try to address when you should go out and hire a business plan writer versus taking on the task yourself. First time entrepreneurs often cringe when sitting down to write their business plan. Some spend 6 months agonizing over each period and comma, and even worse others spend 6 months procrastinating and do nothing. So let’s break it down and see where / when a business planning company should be brought in:

Who will read your business plan and why?

First you need to really understand the purpose of your business plan and who your audience (reader) will be. This is an important point as a business plan being written for a $100,000 loan is VERY different than a document needed for a $10 million round of venture capital! Since this article is focused on first-time small business owners, I will focus on preparing business plans raising less than $1 million in capital. For this “startup” or “seed” business plan 30-35 pages are perfect. You are not expected to deliver a thick book (and no one will read it anyway!). Once you have this down, you can honestly assess which sections you are qualified / comfortable writing and which may need consulting help.

Here is what you should write on your own

It is important for you to write a basic draft / outline of your business plan. Without this direction you are probably asking too much of your consultant. Once you have your thoughts organized on paper you can see what you are comfortable completing. Here are a few suggestions:

Executive Summary: Draft the opening of your business plan – then hire a pro to come in and re-write it. Your executive summary will be read first and first impressions are critical!

Marketing: You need to write your own definition of your target customer / audience. For the market research on industry growth and fancy charts go ahead and hire a consultant.

Competitive Analysis: You should put together the first draft of this section, as it is almost as important to understand your competitors, as it is your customers. If you find a consultant that is an expert in your field, then you can work together and add to your initial list.

The Dreaded Financials

This is the most difficult part of a startup business plan, as you are making projections and assumptions on products / services that you have not even produced or sold yet! If you are stuck on this section you can hire a business plan consultant to just assist you with completing your projections (income statement, cash flow, and balance sheet). Figuring out the cost of goods, delivery costs, and return rates can be simplified by breaking them down into a “light” spreadsheet. Next you need to understand your startup and operating costs – items like electricity, travel, phone expenses, etc. Again just organize these and your consultant can make all the fancy charts and graphs. Just make sure you understand all of the assumptions – for example if you are opening a retail business, you should not look towards your consultant to “guess” your rent – go out and meet with a realtor and come back with real data. If you work closely with your consultant, the financials are a great section to bring in professional help.

Managing Expectations

Now that you know a bit more about when to hire a business plan writer you also need to manage your expectations. You can’t expect a $1,000 business plan to have 20 pages of competitive analysis and a full-blown marketing strategy! If you carefully work through which sections of your business plan need outside help and then manage your consultant closely, your final document will be a success! My next two articles will focus on “How to Find / Hire a Business Plan Consultant” and more importantly “When to Fire your Business Plan Consultant!”

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You may need to interview a number of different business plan consultants or consulting firms before making a choice of who to work with. It is more important at this stage to make sure you have positive answers to the following three questions below than to simply find the lowest price consultant. The final question should help to expand your search if needed.

Do they listen to your questions and answer them clearly?

If you find the consultants you speak with are more interested in selling their services than listening to you describe where you are with the business idea and the specific help you will need, this situation will not likely change as you move forward. Furthermore, the consultant’s answers to your questions should be clear to you. If they are full of industry jargon which the consultant will not explain to you, beware that they may produce results which go over your head and you cannot easily evaluate.

Do they explain their process to you and include multiple points for your input?

Certainly, any business plan development process will begin with the consultant interviewing the entrepreneur to learn all they can about the research they have done, the idea, and their strategy so far. Be sure that the process will then include at least two opportunities after that initiation phase for you to receive a draft of the work completed to date and provide feedback on the direction it is taking so that adjustments can be made. Without these opportunities for your input, the final plan can run away from you and become a description of a business you do not want to, or are incapable of, starting.

Do they care about the quality of your idea?

If a consultant doesn’t care to find out what your basic idea is and to get an early sense of its feasibility before starting work, beware. Successful business plan consultants speak highly of their success rate in helping clients get funding. If they work on business plans that are doomed from the beginning, they will lower that success rate. Only consultants who are interested in taking the money and running will not care if you are starting out with a good or bad idea in the first place.

Why stay local?

Finally, with video conferencing and email widely available, there is no reason to limit your search to local consultants. If you have no fear of throwing a wider net in search of the best consultant for you, you can use this technology to connect with individuals you may never meet in person during the process. When you put local consultants in competition with virtual consultants you will find the best leverage to negotiate prices, as long as you are comfortable with virtual collaboration methods.

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Working with a business plan consultant can take a great load off of your shoulders, giving you a knowledgeable partner and advisor in the business plan development process. Consultants can usually take on the entire business plan development, even including helping you seek funding sources and presenting the plan with you to funders. Alternately, you can request a consultant to simply discuss how to get started, review a drafted plan, or answer other specific questions. Assuming you use a consultant to develop the entire business plan, here are some of the benefits you will achieve.

Research

Consultants can make much quicker work of the process of finding the research you need for your business plan. They know where to look and may already have subscriptions to helpful databases. They will also know how to sift through all of the information available to find data which is especially helpful to make the case for your business. Some of the basic market research may have already been done by the consulting company, saving more time.

Strategy Review

Although you may have selected a business strategy already, consultants can ask key questions, just as funders would, to try to strengthen your strategy. They can determine additional directions to research based on questions they raise and help you to spot additional opportunities you may have missed. In general, they will help to check that the strategy for your business, marketing and operations, matches the market research and analysis you have done and the competitive advantage you are trying to create.

Financial Projections

Consultants will have financial models to help them quickly create financial projections for your business plan and to spin these out into pro forma financial statements as required by funders. They will understand how the projections should be tailored to your specific business sector and should be able to work with you to zero in on projections you are comfortable with.

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Anyone planning to start a business needs to have a plan in place if all is to turn out right. Coming up with a business plan, no matter how small the business may be, is sometimes not very easy and may call for the services of a professional business consultant. The need to have a business plan is propelled by the fact that later on in the life of the venture, one may need to present it to investors for planning or partnership.

A business plan consultant is normally in a position to tell you what key points need to appear on your document. One may wonder why such a crucial document is so difficult to write, but as earlier mentioned, it needs to capture and sustain the attention of whoever will be reading it. The content will also be determined by the amount of starting capital that is being looked into at the start of the venture. A business plan written with an aim of getting a loan of $50,000 is definitely different from one that is targeting $5 million. All the same the content should not be more than 40 pages.

As a suggestion to what the business plan should contain, the consultant will guide you through the various sections of the document. The first one is the executive summary which should capture the main points of the content. Remember that, the first impression is the lasting impression and so, what the reader draws from here will determine his general judgment about you and the business.

You need to explain how you will market your business and what your strategy for growth and expansion will be. These two factors will be faced with competition from other ventures in the same industry, so be clear about how you plan to step up your game to deal with competition. The other most important bit is the budget, in which you should capture all the requirements for the start up and their costs. Be careful with the figures, neither underestimating nor over quoting prices.

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If you have the benefit of even one session with a business plan consultant, come prepared with questions to ask him or her. If you have a draft of your plan, see if the consultant can read it before you meet to make the meeting more productive.

What Do Funders Want?

One of the most important topics that business plan consultants can offer their expertise on is what investors and lenders (and specific classes of each group) want to see in a business plan. If you have written a draft, they can relate this knowledge to what you have created with specific guidance on how to develop the plan further. Also, asking questions about what your type of intended funder want to see in a business plan will give you a good idea of whether the consultant has experience in this area or not. This can help you evaluate potential consultants if you are shopping for one to contract for additional work.

Is My Research Complete?

Research into the market, customers, coEric Powers is associated with Growthink, a business plan consulting firm. Since 1999, Growthink has provided <a rel=”nofollow” onclick=”javascript:pageTracker._trackPageview(‘/outgoing/article_exit_link’);” href=”http://www.growthink.com”>business plan development</a> services for more than 2,000 entrepreneurs and business owners who have raised more than $1 billion in growth capital.  Call <strong>800-506-5728</strong> today for a free business plan consultation with a Growthink <a rel=”nofollow” onclick=”javascript:pageTracker._trackPageview(‘/outgoing/article_exit_link’);” href=”http://www.growthink.com/businessplan”>business plan writer</a>.
mpetitors, and costs you will encounter can never cover every potentially useful piece of data, as this would be cost-prohibitive for entrepreneurs. However, ask whether your research is complete enough to support your argument and calm any worries about the business’s feasibility. As research is one of the most time-intensive areas of business plan development, and generally an area consultants can help with, this is a good question to find out if you are on target.

Does My Strategy Make Sense?

While it is difficult for an outsider without the same knowledge of your resources, industry, and specific situation to know if your strategy is the right one, they should be able to say whether it makes sense in the context of the business plan. If the strategy does not seem logical based on your resources and research given in the plan, ask for actionable steps you can take to adjust the strategy or additional questions you can ask yourself to this end.

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