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You Are Here: Home - Newsletters - "Organized For A Living" - Article

Should You Write Your Own 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 and affordably? Will what you do yourself be ADEQUATE to get funding?
THE DO-IT-YOURSELF BUSINESS PLAN

Unless you are seeking particularly large amounts of capital, you can create the initial draft of the plan yourself. Take a class through the Service Corps Of Retired Executives or the local Small Business Development Center. Check out some BOOKS on putting together a business plan. Or get some COACHING for someone who has written successful business plans in the past. As long as you can clearly get your message across, you can have other advisors review the plan before it is finalized.
A LEARNING PROCESS

It is in learning the 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 the planning process is an invaluable business experience. And you need to know the plan inside and out and really UNDERSTAND the variables involved. You are the one who will be asked the tough questions by potential investors or lenders, such as ďWhat will you do if only half your expected revenue comes in?Ē or ďWhat will you do if you find out that direct mail is not working for you as your primary marketing tool?Ē
OUTSOURCING THE BUSINESS PLAN PROCESS

Entrepreneurs are fire fighters. One of the 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 canít afford the learning curve to be able to develop a high-quality plan -- particularly one that will meet the needs of lenders or investors.
HIRING A CONSULTANT

When you hire a consultant, you guarantee that the work will get done in a timely fashion. 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 still havenít done all the work. Planning should be high priority work, but it is hard to get to when customer calls and employee problems require immediate attention. And the price of hiring the consultant will be SMALL in comparison with the increases in growth and profitability of the business.
WHEN YOU NEED FUNDING

Hiring a consultant will also insure that your business plan 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 wonít question. Once youíve been through the business plan process many times, you know what it takes to get FUNDING -- what to emphasize and what to play down.
SOME PERSPECTIVE

And finally, the consultantís OBJECTIVITY will allow for non-emotionally-based projections and expectations for the business. A consultant will be much more objective in the process and question your assumptions, making it less likely that the business will have PROBLEMS down the road. The consultant has no emotional investment in making your business look better than it is, so you will get a much more accurate picture of your strengths, weaknesses, and future potential.
YOU CALL THE SHOTS

No matter what, donít let a business planning consultant talk you into putting any information into your plan that you arenít COMFORTABLE with. If it doesnít look right to you, it probably isnít. It is your business, and you will be stuck with the plan long after youíve paid the consultantís bill. Make sure it is the plan that you WANT, one that matches your goals and objectives, and captures the way you look at business and the spirit of your company.
FINDING THE RIGHT PERSON

If you do decide to hire a business planning consultant, here are some of the important questions to 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 were funded?


  • How much TIME will you need of mine during the planning process?


  • When will the plan be COMPLETED, and how many drafts will I have the opportunity 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 to present the plan to my other ADVISORS before the final draft is done?


  • How do you work in COLLABORATION with my partners and advisors so their input is taken into consideration during the writing of the plan?


  • Do you do the market research and the financial spreadsheets, or are those things done SEPARATELY (and charged for separately)?


  • Does your price include CUSTOMIZATION for certain types of funding (to include different information needed by investors versus lenders)?


  • Does your price include COACHING to prepare me to talk with lenders or make financing presentations?


  • Will I have an ELECTRONIC version as well as a hard copy version of the final plan (so I can make changes later if I need to)?
A BLENDED APPROACH

The strongest business plans are a COMPILATION of work between the vision and goals of the entrepreneur, the technical understanding and expertise of his or her accountant and other professionals, a consensus of employees or others, and the research and writing abilities of the business planning consultant. The consultant should meet with all parties involved, talk about what is needed for the plan, and use all the RESOURCES available to get the work done as quickly and cost effectively as possible. It is the consultantís responsibility in the process to take all the pieces and make the final plan into a readable, accessible document that will stand up to scrutiny.
BE SMART

Donít pay a lot of money for a plan unless you are looking for large amounts of capital. I have heard horror stories by people who paid supposed experts much more than necessary for a poorly written or INCOMPLETE plan. Ask your banker for business planning consultant recommendations -- or talk with someone who had a good experience having a business plan written for them.
ONLY A START

Donít expect to get a finished plan that is a ROADMAP of everything you need to do to have a successful business. If you are hoping for something that will tell you how to market or how many people you need to hire, you will need a deep strategic planning process, and of consulting time to get you going. And you canít hold the consultant RESPONSIBLE if you donít get funding based on the plan Ė- too much is based on your own credit and management skills.
BE REALISTIC

Donít expect a great a business plan from a poor business MODEL. If your business isn't profitable, the business planning process will help you discover that. Then it will be up to you to make the hard decisions to make the business work. A good business plan can help you highlight your strengths and minimize your weaknesses, but it cannot make an UNWORKABLE business model into a thriving business.
ONE FINAL THOUGHT

Pay attention if everything in the business planning process tells you it wonít work. Things donít get better out in the real world if they donít work on paper. Deal with the WEAKNESSES Ė- but if your plan tells you that you canít make enough money to make the business work for the long run, pay attention to that REALITY.

 

Jan King is the former President & CEO of Merritt Publishing, a top 50 woman-owned and run business in Los Angeles and the author of "Business Plans to Game Plans: A Practical System for Turning Strategies into Action". Visit her website at www.janbking.com for more information.


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