Once you have accepted the conventional wisdom that a business plan is essential for any small business, the question then becomes whether to write it yourself or to seek professional help. You might be surprised when I tell you that I am an advocate of business owners writing their own business plans, especially if you are writing it principally for your own benefit. To those of you determined to get your ideas down on paper, I would advise that you keep your written business plan short and practical. It should be big enough to cover your strategy, review schedule, milestones, tasks and responsibilities, as well as all the basic numbers such as projected sales, costs, expenses, and cash flow. I cover what I consider to be the business planning essentials for those writing a plan for their own benefit in another article you can read by clicking here.
When you require a business plan for what Tim Berry calls a "business planning event", the stakes are alot higher and you might feel worried that you will miss out on investment if you present a poorly written plan or fail to include expected information. This still doesn't mean that you definitely shouldn't write it yourself. There is plenty of information out there that will help you follow an appropriate structure. Indeed, you can read an article that we wrote about a structure that we would recommend for a plan destined for third party eyes. There are, however, two instances where I would strongly recommend that you seek professional help. These are:
At first glance it seems that by writing your own business plan you are saving the costs of employing somebody else to write it for you. That idea, however, doesn't take into the account the idea of opportunity cost. The Small Business Administration (SBA) in the US recently conducted a study of the average time taken to produce an investor ready business plan and they concluded that it took on average 400 hours including all the time taken conducting the relevant industry and market research. If this sounds like a long time, bear in mind that learning how to write a business plan for the first time is time consuming. The reality is that choosing to do it yourself will keep you away from other obligations or opportunities within the business. Ask yourself honestly, what is being displaced by the time you are dedicating to writing the plan? What else could you be doing if you had outsourced or delegated the task of researching and writing your business plan?
In weighing up whether the opportunity cost of writing your business plan is greater than the cost of employing a business plan consultant, the maths is pretty simple. If we use the 400 hours that the SBA suggest we need to write an investor ready plan, we just need to assess what each of those hours might be worth to you in terms of what you could earn in that time. If you think about it in this way, unless you are using an extremely expensive business planning service, as long as you could earn at least minimum wage in each of those 400 hours, the opportunity cost of employing a business plan consultant is likely to be significantly greater than the actual cost.
If you have not yet started your business, are not accepting any work, and are planning to write your business plan in the evenings after you come home from your regular salaried job, you probably aren't losing any potential income by writing the business plan yourself. You are, however, delaying engaging with other important start up activities like finding your first customers. if you have already started the business, and researching and writing your business plan takes you away from acquiring new clients or work you already have, you will very likely be losing money rather than being thrifty.
As I mentioned at the start of this article, I do believe that any business owner would benefit from writing their own plan, especially if it is not intended for an external audience. However, bank managers, investors or venture capitalists have certain expectations and your plan will need to meet these expectations if you hope to gain the investment you seek. My experience of working with small business owners is that the people who start businesses normally come from strong technical backgrounds. Whilst they are often very intelligent, it is unusual for them to have the required combination of strong writing ability, being adept with numbers and have the ability to perform thorough research. Where these skills are not present, you are probably better off employing a professional to write your business plan for you. A poorly written business plan can ruin your chances of getting financing, as well as encumber your business in other ways. For instance, a poor operational or marketing plan could result in poor customer service or failed marketing campaigns whilst inaccurate financial projections could lead you to overcommit resources to a business with little prospect of providing a return on investment.
Now, let's imagine that you are one of the minority of small business owners that has the skills required to create an investor ready plan. You currently work five days a week and are planning on saving money by writing the plan in your spare time in the evenings and weekends whilst preparing to launch your business. Let's look at a few problems that you might encounter trying to do it yourself that may lead you to fail to produce a document that is fit for purpose.
So you see, despite my being a strong advocate for small business owners writing their own business plans, there are instances where it makes more sense to employ a professional business plan writer. It's important that you carefully weigh up the pros and cons of writing or not writing your own business plan as this is a decision that could have far reaching consequences for you and your small business.
If you want to discuss our business writing service here at Continuous Business Planning, feel free to contact us for a confidential, no obligation discussion of your business idea. You'll find that our services are surprisingly affordable. Alternatively, talk with us about how we could help and support you in your efforts to create and implement your own business plan. Unlike most business plan writers, we do not stop when your document is completed but instead offer a full business support service to help you execute your plan and turn all that careful planning into reality. We wish you all the best on your entrepreneurial journey and look forward to hearing from you personally if you feel our services could be beneficial for your business.