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Business Plan Info

July 30, 2006

Q- I am preparing to write a business plan in order to raise some outside funds. Should I use one of those canned programs or should I hire someone to do it? Do I really need to write this business plan at all as other friends have told me that they started their business without a plan? Finally, do most potential investors look at the novelty of the business, the finances or the marketing strategy?

Writing a business plan is critical to the success of any business.

Think of it this way. If you try to drive to Chicago from Florida without planning how to get there, you might never reach your destination. In much the same way, a plan sets the direction of your future business in so many ways. It will help you define your market, plan for assembling a team, and make sure the business is financially viable. Bottom line: You need a business plan.

There are three ways to write a business plan. First, you can get one of those canned programs. I am not a fan of these because they lock you into their style of business plan. Many potential investors can spot these canned programs and are turned off. Also, you really need to know the business plan inside and out so that you are ready to answer every question potential investors might toss your way.

Hiring someone else to write your plan is sometimes a good idea, but, again, it lets another person take charge of communicating the painstaking details about your plan. Also, it is very expensive, running from between $5,000 to $15,000. Rather than hiring someone to write your plan I think it is much better to hire someone to edit your plan once you get it written.

I would encourage you to write your own business plan. It’s not an easy task, but it will pay so many dividends. I was miserable every time I had to write one of my own business plans, but it forced me to think through the details. The writing process really helped ferment my ideas for how I wanted the business to operate. While I griped during every day spent in the writing stage, when it was done I was glad that I had endured the exercise. My experience led me to write a book, “So You Need to Write a Business Plan” that is available from Amazon.com and can help you through the process step by step.

When it comes to investors, they are most interested in the leader of the business. I like to say that investors invest in jockeys not horses, because it is the jockey who guides the horse. While a business plan is a necessity, most people that I know who invest in small businesses place the greatest emphasis on the person who will be running the business, so make sure you highlight your pertinent experience.

Thanks for asking such important questions.