I often get emails coming through that ask me to “do a business plan”. When I phone the business owner up, and ask what they are looking for, I get told that they have a business idea and have done some informal research and it seems like a good idea… please can I write them a great business plan so they can start or grow their business.
Now some people might say that it sounds like a good business opportunity. Charge them a fee, ask them to email me their thoughts and informal research, and whip up a business plan using a template that I’ve created. If they want changes, I charge them an editing fee until they are happy.
This would probably earn me a fairly nice fee but I don’t think that I would be doing them proper service in the long run. Here’s why I say that. A business plan has many functions:
• It can serve as a vehicle to approach finance houses for finance.
• It can be used to attract investors.
• It can be used to get business partners involved.
• It can give you a roadmap to move forward.
• It can help you think your way through your business idea.
For me, having a business owner write the business plan themselves initially helps immeasurably with the last 2 points. Most importantly for me is the last point. When an entrepreneur takes the time to work through the different areas of a business plan, it forces them to concretely think around the different areas that are important.
• This might be doing proper market research that is quantifiable.
• Who are their competition, what are they offering and how can you differentiate yourselves?
• Who is your ideal client, why do they buy and how can we find them?
• How much finance do we need to start off and what will our cash flow projections be going forward?
• Have we priced correctly taking the above into account?
• What resources will we require, in what order and when?
As new business owners are putting these items down on paper, it’s forcing them to pause and do the exercise. This will help them in many ways:
It forces them to get used to the idea that starting a business is hard work.
It shows them whether it’s a viable business idea.
It makes them come to terms with financial data, cashflow projections and financial systems.
It sharpens their business knowledge, terminology and acumen.
It teaches them how to type a proper business proposal for later on in their business growth cycle.
It allows them to become intimately involved with the whole idea so that they can rattle off a simple elevator pitch if asked what their new business it about.
These are important skills and areas that the new entrepreneur must come to grips with. Even if they produce this great business plan and afterwards stick it in a drawer, it would have allowed them to grow as a person and business owner. I’m not saying that it should be stuck in a drawer, but that it’s a good way to formalise a great idea.
This business plan can then be used as the basis for a 1 year strategic plan going forward, can be used and adapted for financial reasons such as applying for finance of investors, and can be a living document to form company values moving forward.
A business plan does need to be a living document going forward, and should be changed and adapted as the business grows and market conditions change, product lines expand, change and grow. It can also serve as a great retrospective tool, to look back after a year and see if you are in line with your dreams, what changed from your ideas and allow you to be introspective about the business journey.
If you’ve done this business plan, and are not comfortable with some of the sections or areas where you feel that you have weakness or you are uncomfortable with some of the language that you’ve used, then it would be an idea to contact a professional business plan writing company to polish your plan.
They’ll have something to work with and it will still show your personality and passion. When investors or financial institutions read your business plan, they quickly pick up whether you’ve had a hand in it or if it’s an off-the-shelf version. This may directly or indirectly influence how they think about you as the business owner and the type of person you are and how it reflects on the type of business you’ll run.