If you are raising funds for a start-up or to grow your business you will need a business plan – one that includes a financial forecast and a well written commentary. However, what is the best way to improve your chances of success? Should you write Your Own Business Plan or Get a Professional in?
Write Your Own Business Plan
For micro businesses raising small amounts of investment (say under £50,000) this is likely to be the best approach. After all, it doesn’t make sense spending 10% or 15% of the funds you are trying to raise on getting someone to help you write a plan! So, in this scenario, it is a good idea to used on-line applications or software templates provided by high street banks to help you. However, just beware that you may have to repeat the application process several times in different format if you don’t have a stand-alone business plan.
Larger Businesses
For larger businesses too there may be value in writing your own plan. For instance, if you have the skills to write your own plan then you will know every detail of it. Consequently, this will help you when questioned by a bank or potential investor. After all, everyone wants to avoid those embarrassing moments played over and over on Dragon’s Den where the entrepreneur looks vacant when asked for details of their gross margin or net profits in the first year of trading!
In addition, writing your own plan will show your all round commercial ability. For example, you can demonstrate that you appreciate all aspects of the business work together. Consequently, there is a good chance that you will understand how to drive it towards success. Business Plan Software & templates (like LivePlan) abound on the internet to support this approach and there are plenty of “Do’s and Don’ts” published free to guide this process. However, be careful! One plan can look the same as all the others and it is the content that counts!
Drawbacks
The draw backs of this approach are several. For example, many people do not have all the financial, sales, marketing, operational skills and experience necessary to construct a good business plan. In addition, they may lack the ability (or time) to integrate them into a solid business case. Or, some people may not have the writing skills to bring the plan together. Finally, some people may find themselves “too close” to the business to clearly and simply convey the business opportunity. So, weakness in any of these areas may reduce your chances of securing funds.
Business Plan Writing Services
The alternative to Write Your Own Business Plan is to get some help from an experienced hand. For example, accountants and sometimes solicitors as well as independent copywriting services have offered these services. However, there are now an increasing number of companies specialising in providing business plan writing services. In other words, these companies bring specific independent expertise to the table. For example, as well as writing skills they can have a broad base of commercial experience including financial forecasting, In addition, as they are independent, they can provide an objective perspective on your business. Finally, as well as offering business plan writing itself (both financial forecasting and the written plan) they may also offer help with “pre-business plan” research and feasibility and even introductions to potential sources of funds.
When selecting business plan writing services there are a few good guidelines worth following:
Commercial Experience
The ability to write well is not enough to make your plan investable. This is not an academic exercise. So, look for companies with first-hand commercial experience. And, avoid companies that only have an academic or theoretical background. For example, if you are going to secure funding you need to construct a business case that integrates all commercial aspects of your business. So, be sure that the people writing your plan have several years of senior commercial experience – the broader the better. Importantly, this commercial experience should include budgeting or forecasting – your financials are a critical part of your plan.
Track Record
Many business plans are confidential and written under confidentiality agreements. So, do not expect to see many examples flying around from good companies. However, companies providing business plan writing services should be able to provide written and attributable testimonials from clients. Therefore, a good idea is to ask whether they have any from your area of business.
Pricing
Prices range vastly. And, like everything, you tend to get what you pay for! But, if you focus on organisations with genuine commercial experience, prices generally start from around £2,500 for small start-ups upwards to £15,000 for larger corporate plans. So, the price generally reflects the complexity of the business model. Make sure you ask for a specific proposal that outlines exactly what you are going to get for your money, the timescale, and price. Finally, consider “virtual services” rather than “face-to-face” consultants to reduce your costs but not the quality of work.
Ownership
One potential disadvantages of having a business plan written for you are that you will not “own” the business plan and be totally familiar with it. So, ensure that you are fully involved in the process and that there is time scheduled for you to review and discuss each aspect of it. For example, read the research, get the financial forecast explained to you, and understand how each element of the written plan is joined together.
Funding
If you are looking for funding, check whether business plans that they have created have secured funding. However, bear in mind that funding depends on a wide variety of factors. So, it is not just the quality of the business plan that counts. But, it is an important part of the equation. So, any specialist service should be able to quote a few examples where their business plans have helped to secure funds.
Conclusion
So, Write Your Own Business Plan or get some one to write it for you? You should improve your chances of securing funding by engaging a specialist business plan writing service. However, make sure you are fully involved in the process, & choose people with first hand commercial experience. You need to own the plan at the end of the day and know it inside out and backwards.
Good Luck!
Jon Hunt
Lead
The Business Plan Team
www.TheBusinessPlanTeam.co.uk