Any entrepreneur starting a new business needs a business
plan. Banks require them as do any financial partner, but
more importantly, a business plan helps you to sort out various
aspects of the business startup that may have been overlooked.
Business plans are
developed for more than advising others. A well-written
business plan helps you define your goals. Few business
plans are written that aren't revised in the process, often with
major changes, and a business plan is also a great benchmark for
Should You Write Your Own Business Plan?
by: Jan B. King
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 the 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 the 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 the 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 the process and what to expect.
There are some good reasons for an entrepreneur to do the
- First of all, because you can. If youíve 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 the plan before it goes to lenders or others, you can do this
- 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
- 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 have an urgent
need for the funding and canít afford the learning curve to be
able to develop a high-quality plan that will meet the 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 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. The sooner the
plan is completed, the sooner funding can be attained. And the
price of hiring the consultant will be small 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 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.
- 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 after the funding comes in.
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
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 of them were funded?
- How much time will you need of mine during the planning
- When will the plan be completed, and how many drafts should I
expect to see and 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 for you to present the plan or
for me 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
- Do you do the market research and the financial spreadsheets,
or are those things done separately (and charged for
- Does your price include revisions or 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
The Optimum Solution: A Blended Approach
At best, the planning process should not be at either end of the
spectrum, but squarely in the middle. In my experience, plans that
win funding come from a true collaboration between a skilled
consultant/facilitator and the entrepreneurís team of employees
A business planning consultant can act as a coach, first
assessing the job to be done, and then recommending who is best to
do it. The business plan should be 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 investor/lender scrutiny. My final caveats:
- Donít pay more than a few thousand dollars for a plan unless
you are looking for capital of well over $1 million. I have
heard more than a few horror stories by people who have hired
university professors assuming they are the experts (they
arenít) and paying tens of thousand of dollars for a poorly
written or incomplete plan.
Ask your banker for business
planning consultant recommendations, or better yet, talk with
someone who had a good experience having a business plan written
It is reasonable for a consultant to expect you to pay
half of the fee up front and the other half at the completion of
the plan. 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.
- Donít expect to get a finished plan that is a roadmap of
everything you need to do to have a successful business. That
isnít the purpose of the business planning process. A
traditional business plan is intended only to document your
strategies for the business very briefly Ė but well enough to
If you are hoping for something that will tell you
how to market or how many people you need to hire, you will have
to start with a deep strategic planning process, and probably
buy lots of consulting time to get you going.
- Donít expect a great a business plan from a poor business
model. If your costs are too high to make your business
profitable, the business planning process will help you discover
that. Then it will be up to you to make the hard decisions about
changing your costs structure to make the business work.
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 it cannot make an
unworkable business model into a thriving business.
And one final thought: Donít go on to start a business or make
changes in your current business 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.
with the weaknesses Ė get more training, consider product
redevelopment, or have a home-based business to reduce costs until
you can sustain the rent for an office. Businesses fail finally
because theyíve run out of money. 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.
About The Author
Jan B. King is the former President & CEO of Merritt
Publishing, one of the 50 largest woman-owned and run businesses in
Los Angeles and the author of Business Plans to Game Plans: A
Practical System for Turning Strategies into Action (John Wiley
& Sons, 2004). She has helped hundreds of small businesses turn
their business plans into game plans with her book and her ebooks,
The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself
Game Plan Workbook. Visit her site at www.janbking.com
for more information.