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Entrepreneurialism Information |
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Should You Write Your Own Business Plan?
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 business plan:
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 can't 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:
No matter what, don't let a business planning consultant talk you into putting any information into your plan that you aren't comfortable with. If it doesn't look right to you, it probably isn't. It is your business, and you will be stuck with the plan long after you've paid the consultant's 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. 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: 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 entrepreneur's team of employees and advisors. 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 consultant's 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:
And one final thought: Don't go on to start a business or make changes in your current business if everything in the business planning process tells you it won't work. Things don't get better out in the real world if they don't work on paper. Deal with the weaknesses - 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 they've run out of money. If your plan tells you that you can't 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, 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 (John Wiley & Sons, 2004). She has helped hundreds of businesses with her book and her ebooks, The Do-It-Yourself Business Plan Workbook, and The Do-It-Yourself Game Plan Workbook. See www.janbking.com for more information.
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