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Should You Hire a Business Plan Writer or Business Plan Consultant?

September 15, 2010 by Frank Goley, Business Consultant

Should you hire someone to write your business plan? 

The answer is Yes and No.  You do not want a Business Plan Writer or technical writer to build the business plan.  You can use these writers after the business plan is built to make it more professional (i.e. adapted for a Funding Business Plan).  However, hiring an experienced  Business Plan Consultant can be quite advantageous when building a business plan.

A Good Business Plan Consultant Understands Your Business

A good Business Consultant will take the time to get to know you and your business. The business plan consultant will issue you important business plan questions and requirements for you to answer, which when analyzed by the consultant, will build an effective Business Plan.  Nobody can solely write a business plan for you.  The business owner and management team must be integrally involved in the business planning process as you know your business better than anyone else.  A good Business Plan Consultant harnesses the necessary information by asking the right questions in order to build a solid Business Plan, while applying and providing valuable expertise and experience during the planning process.

Benefit from the Experience of a Business Consultant

A  Business Consultant can also offer years of experience in working with many different types businesses, business stages, and business sectors, utilizing that know-how and experience in building your Business Plan.  If you hire a Business Consultant early on in the business development stage, the consultant will not just help to build an effective Business Plan, but also be available for advice as you implement your Business Plan and grow your company.  A Business Consultant can show you effective ways to maximize profits and margins, while minimizing expenses.  Moreover, a Business Consultant can introduce you to important business networks and connections to bolster your company operations.

ABC Business Consulting offers the best of both worlds:  Business Plan Writing and Consulting Services for companies in any stage and industry, for most purposes, including Business Success Plans, Start Up Business Plans, Growth Business Plans, Acquisition Business Plans, Joint Venture Business Plans, Project Business Plans, Marketing Business Plans, Strategic Business Plans, Funding Business Plans, Venture Capital Business Plans, Investor Business Plans, SBA Business Plans, Bank Business Plans, Lender Business Plans and more.

ABC also offers Free Business Plan Reviews.

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Tips for Writing an Effective Business Plan

September 10, 2010 by Frank Goley, Business Consultant

Business Mentor Review 

Have a business mentor who has a lot of experience in your area of business read your business plan and critique it. Use the feedback to tweak your Business Plan. 

Don’t Go Crazy with Excessive Graphics  

Business Plans do not need a lot of fancy graphics and art work to be effective.  Simplicity and straight forwardness are more important than a bunch of pretty graphs.  Many modern business plans lack substance and have lots of flash.  Add some flash and graphics to the plan after the substance of the plan is completed and only if it aides the understanding and comprehension of the written content. 

Develop a Good Business Plan Process 

What is the most effective way to build a business plan?  For each section of the plan, write out questions prior to writing the section.  Pull the questions from your experience, your team’s experience, your mentor’s experience and published business planning books and software.  Answers to the questions will build out that particular section.  Order the sub-sections in a logical, building block order. Please see my Business Plan Book for more details on this business planning process.  

First Develop the Comprehensive Business Plan 

After you have developed your Comprehensive Business Plan, you should develop specific business plans of shorter length and format (usually no more than 20-30 pages in length) for various purposes:  Funding Business Plan, Investor Plan, Joint Venture Business Plan, Marketing Business Plan, Strategic Plan, Customer Plan, Supplier Plan and so forth. 

A Business Plan is a Business Document 

A Business Plan is a technical document – a business document.   It should be written as such.  It should not be written like a novel or a book.  It should be concise and utilize outline organization versus long, wordy paragraphs. 

Realistic and Believable  

A business plan should be realistic to be believable.  It should contain facts and figures to support the “believability factor.”  For instance, just stating in your Marketing Plan that you will achieve 5% market share is not enough.  Your Strategic Plan in combination with your Marketing Plan should carefully illustrate how you will achieve 5% market share. 

Business Plan Purposes 

A comprehensive Business Plan serves two purposes typically: a dynamic document to run your company successfully, and a document to start, acquire or expand a company, all backed by the shorter version business plan formats (i.e. a Funding Business Plan). 

A Successful Business Plan is Dynamic

An effective Business Plan is never static.  It should be dynamic and easily adaptable to changes in the market and opportunities which arise.  It is a “living” document used to run your business on a daily, monthly, quarterly, and annual basis.

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Forming the Appendix Section of a Business Plan

September 9, 2010 by Frank Goley, Business Consultant

An Often Overlooked but Important Section

The Appendix of a Business Plan can be an overlooked section, but it has a lot of importance and utility. The appendix shows the amount of research, time and detail behind the business plan. It comes last in a business plan, following the Financials Section.

Organize and Reference Your Appendix Materials

As you write a business plan and accumulate resumes, research, contracts, etc, be sure to place them in a pile to be included in the Appendix. Also be sure to reference the materials in the business plan so the reader can refer to them when and as applicable.

Table of Contents

Since an Appendix is often large in volume, it is important to have a table of contents in the beginning of the section, detailing what is contained and where it appears in the Appendix section.

What the Appendix Can Contain

The Appendix Section of a Business Plan contains all the bulky items:  marketing research, construction plans, appraisals, valuations, company art work and graphics, company charters and share details, and so forth. 

Item List for a Business Plan Appendix

The Appendix contains important documents, agreements and voluminous materials that add clarity and detail to your Business Plan.  This list is not all inclusive and should be expanded and customized per your business and business plan requirements.

1)     Detailed Resumes

2)     Customer Testimonial and Recommendation Letters

3)     Future Customer Letters of Intention, Letter of Interest and Memorandums of Understanding.

4)     Reference Letters:  Customers, Suppliers, Bankers, Technical, Former Employers, Partners, etc.

5)     Joint Venture and Strategic Alliance Agreements

6)     Land Purchase Agreements

7)     Product and Service Agreements

8 )     Other Important Agreements

9)     Contracts, Leases and Pre-Sale Commitments

10)  Patent, Trademark, Service Mark, Copyrights, License Agreements

11)  Brochures and Advertising Materials

12)  Industry and Marketing Analysis and Studies

13)  Supporting Articles

14)  Product Line Pictures, Renderings and Illustrations

15)  Facilities and Equipment Pictures and Layouts

16)  Maps and Photos of Business Locations

17)  Construction Plans, TimeLine and Disbursement Schedule

18)  Engineering Studies

19)  Company Registration and Charter

20)  Company Credit Report

21)  Tax Returns:  previous three years

22)  Annual Reports / Quarterly Reposts

23)  Appraisals and Valuations

24)  Feasibility Studies

25)  Prospectus Offering

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The Financials Section of a Business Plan

September 8, 2010 by Frank Goley, Business Consultant

Lay the Foundation with a Good Strategic Plan

If you develop your Strategic Plan effectively, completing the Financials should not be difficult.  The principal reason why business owners have such a hard time with the Financials Section of a Business Plan is often due to a cursory job on their Strategic Planning (as well as other important business plan sections).  Financial Projections are not believable chiefly because a suitable, well developed Strategic Plan wasn’t accomplished.  Guess what lays the foundation for a successful Strategic Plan?  The proceeding section, the Marketing Plan.  As stated previously, the sections and the order of the sections in a business plan are very important because each section builds on the previous section, the culmination of which makes for certain data from which solid Financial Projections can be made.

Types of Financials

You should have two sets of Financials, simple and detailed, as well as, conservative and best case.  The following types of financials are typical for a Business Plan:

Ø  Cash Flow: Monthly basis for 12-36 months. Yearly and Quarterly basis for 3-5 years.

Ø  Income Statement: Monthly basis for 12 months. Yearly and Quarterly basis for 3-5 years.

Ø  Balance Sheet:  Yearly and Quarterly basis for 3-5 years.

Budgets for Planning and Control

Another very important Financial in addition to the three prescribed Financials, is the Budget.  Budgets are used principally for two purposes:  Planning and Control.  A Budget matches short term targets with long term Strategic Planning, while providing an indication of problems ahead.  A good Budget system will indicate when Expenses are heading over Budget and there is sufficient time to correct the problem. Budgets are often developed during the Strategic Planning Process.

Rolling Budgets

We like Rolling Budgets which look ahead 12 months on a monthly basis, and it budgets an additional Quarter at the end of each Quarter.  This way, you always have a 12 month continuous Budget Outlook.  A Budget should also be flexible so that you can separate the effects of variations between Actual and Estimated results.  Lastly, a Budget is a tool to Evaluate your Business Units and Management’s Performance.  Needless to say, assembling and actively managing a good Budget requires the input of your entire organization.

Financials Relate

It is important to understand that your Financials relate to each other when building them (a reason why Financial Software Programs are so beneficial).  There’s a lot of back and forth between the Income Statement, Balance Sheet and Cash Flow Statement.  The Cash Flow Statement is the most important Financial for many reasons but principally because it shows in detail how much cash is necessary to finance and grow your company.

Projection Period

The projection period differs and depends for a particular company, venture or project.  For instance, a large scale Real Estate development project’s Cash Flow could be 5+ years and 60+ months depending on the length of the project build out.  Also, Real Estate development projects require more Financials than detailed above. Typically, a Construction Cost Analysis and Cash Flow, Schedule of Real Estate, Construction Cost Schedule and so forth are required and useful. Real Estate Development Financials are developed through a Loan Package and transferred to the Business Plan Financial section, so consult how to properly package a loan in order to learn more about these project specific Financials.

Assumptions 

A very important element of the Financial Section is the Assumptions area.  This details the assumptions you have utilized in constructing the financials.  You should also list the various calculations and formulas used in your financials since those formulas can be company, deal or project specific.  Financials should also include Return of Investment / Return on Equity calculations and the assumptions used in those calculations.

Realistic Financials

Your Financials need to be believable and realistic.  If anything, they need to be conservative.  Too often we see extremes of too few numbers or too many numbers.  If you build out your Financials as a direct result of your Strategic Plan, this process results in numbers that are realistic and achievable.  An option is to build two sets of Financials, conservative and a little more aggressive.  We find if you have truly conservative numbers, you will often exceed your Plan, which is a great Psychological boost for any company in any stage of development. 

Example Template for the Financials Section of a Business Plan

1)     Sources and Uses of Funds

2)     Financial Strategy

3)     Capital Equipment Valuation

4)     Company Collateral

5)     Assumptions

6)     Financials

7)     Valuations

8 )     Financial Analysis

9)     Budgets

10)   Exit Strategy

11)   Harvesting Value Strategy

12)   Venture Risk

13)   Effects of Investment and Finance on Cash Flow

14)   Tax Strategies

More Help

Please see my articles on Business Financials for more details in this area…

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The Strategic Plan Section of a Business Plan

September 7, 2010 by Frank Goley, Business Consultant

The Strategic Plan is a Business Plan’s Implementation Tool

The Strategic Plan puts the Marketing Plan into action.  The Strategic Plan will show how to implement the Marketing Plan and a company’s Business Plan. The Strategic Plan is about action and implementation.  It also details your Sales Forecast for each particular product or service.  The Strategic Plan translates what will be the result of the Marketing Plan, and how it will be implemented and achieved. 

The Sales Plan

The Strategic Plan takes the vast amount of marketing information and research and puts it into a clearly defined Sales Plan.  It is very important that a Strategic Plan is believable and achievable.  It works out the “kinks” and road blocks in your Marketing Plan and illustrates how to overcome Competitive Gaps.

Strategic Management

The Strategic Plan also provides a process for Strategic Management, Strategic Auditing and Strategic Reassessment.  The end product not only implements The Company’s Strategy, but also it provides measurable performance, control functions, corrective actions and reassessment when necessary.  It is a top down and bottom up approach, completely integral with your Company’s Operations, from the Vision and Leadership of the CEO, to Management’s implementation of the Strategy, to the Sales and Operations units of the company.  It provides a Company-Wide Strategic Vision, Focus, Structure and Discipline, while providing an atmosphere of learning and awareness, with a process for identifying deficiencies, and in turn, fixing those problems.

Outline of the Strategic Plan Section of a Business Plan

1)     Company Objectives

2)     Potential Problems and Risks

3)     Risk Analysis

4)     Company Strategies, Strategic Tactics and Strategic Programs

5)     Sales Strategy

6)     Sales Programs

7)     Strategic Alliances and Joint Ventures

8 )     Operating Budget

9)     Sales Forecast

10)   Milestones

11)   Control Mechanisms

For more information on developing a Strategic Plan and Sales Plan, please see my article: Developing A Successful Strategic Plan.

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Writing the Marketing Plan Section of a Business Plan

August 31, 2010 by Frank Goley, Business Consultant

First Develop the Products and Services Section of the Business Plan

Developing, writing and implementing a successful Marketing Plan starts with solid Industry and Market Analysis and concludes with an implementable Marketing Strategy and Marketing Programs.  A Marketing Plan is not developed and implemented independently; rather, it should be developed in close coordination with your Business Plan Products and Services Section and ultimately implemented through your Company’s Strategic Plan and Sales Plan. The Marketing Plan Section of a business plan is typically developed after the Products and Services Section of the plan have been developed. This gives the marketing plan process a head start on developing a cohesive and competitive marketing strategy and program.

What The Marketing Plan Does

§  Shows how your product and service will be marketed

§  Summarizes your Marketing Research (the actual research is contained in the Appendix)

§  Fully details your specific Target Market Segments

§  Explains and exploits your products and services Competitive Advantage

How Your Products and Services will be Positioned

The Marketing Plan explains in great detail how your products and services will be positioned in the market, all supported by detailed, believable market research. The Marketing Plan carves out your target market niches and develops effective Marketing Programs, along with a Strategic Marketing Plan.

Example Format of the Marketing Plan Section of a Business Plan

1)     Industry Overview

2)     Industry Distribution

3)     Market Segments Description

4)     Market Segment Needs

5)     Market Segmentation Strategy

6)     Market Trends

7)     Market Growth

     General Nature of the Competition

9)     Customer Choice Factors

10)  Product and Service Competitive Comparison

11)  Competitive Analysis

12)  Competitive Positioning

13)  Competitive Edge

14)  Marketing Strategy

15)  Marketing Programs

For more information and a step by step guide on developing a Marketing Plan, see the ABC Business Consulting Business Plan Workbook.

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The Products and Services Section of a Business Plan

August 30, 2010 by Frank Goley, Business Consultant

Your Competitive Advantages and Disadvantages

The Products and Services Section of a Business Plan is the “meat” of the plan. By the time you get to this section, you should have developed the Company, Management and Operation Sections. It is now time to describe in detail your company’s Products and Services.  This section also contains information on your competitor’s products and services.  One of the most important aspects of this section is to explain why your products and services are unique. This includes your competitive advantage.  On the converse, this section states where you have weaknesses in your product and service line-up.

Start with a Resource Audit

A Resource Audit is an honest self-evaluation of your company.  In this analysis you identify your strengths, weaknesses, opportunities and threats (SWOT), which will be considered in your Marketing Plan and addressed in your Strategic Plan.  In this section you develop your product and service price points, features and value to be fully exploited in the Marketing Plan.  Customer identification, analysis and segmentation starts in this Section to be later developed in the Marketing Plan.

The Products and Services Section Sets Up Your Marketing Plan

This initial analysis of your products and services sets up the success of your Marketing Plan. It lays the foundation to develop an effective Marketing Strategy. Spend time on your competitive advantages and disadvantages, your price points and initial SWOT analysis in this section and developing your Marketing Plan will be much easier and much more effective.

A Sample Format for the Products and Services Section of a Business Plan

1)     Products and Services Description

2)     Awards, Honors & Achievements

3)     Case Studies

4)     Product and Service Mix and Price Points

5)     Product and Service Analysis

6)     Life Cycle

7)     Production Strategy

8 )     Research and Development Strategy

9)     Space Utilization

10)  Departments Descriptions

11)  Future Products and Services

12)  Effects of Technology

13)  Computerization Requirements

14)  Company Sales Literature and Brochures

15)  Internet Strategies

16)  Electronic Ordering and Fulfillment

17)  Inventory Method and Management

18)  Regulatory Compliance

19)  Product and Service Liabilities

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The Company, Management and Operations Sections of a Business Plan

August 27, 2010 by Frank Goley, Business Consultant

In an eight section Business Plan, the Company Section and the Management & Operations Section come in as sections 2 and 3 respectively. These two sections set up the meat of the business, the Product and Service Section, which is typically Section 4 of a business plan. These two sections of a plan are critically important as they speak to the quality of how a company is set up and run, as well as, the quality of the team running the company, which will ultimately spell success for a company. Many think the Marketing Plan section and the Products and Services section are the most important in a business plan, but without sound company management and operational management, the best products and awesome marketing can not make it successful. It is the team and how it runs a company that makes it successful. It is the heart of a company.

A Company’s Management Team is of Paramount Importance

No matter how good the company’s Products or Services, it can not be successful with out the solid building blocks of the Company, Management and Operations Sections of its business plan. I usually combine Operations with the Management section but it can stand on its own or be part of the Company Section. Either way, it is important to establish the connection between Company Structure, the Management Team, Management Objectives and the Operational aspects of the company. It is a very important and necessary triangle to plan well for.

The Company Overview Section

The Company section of a Business Plan speaks to all the pertinent details of your particular company. This section comes first in the Business Plan (after the Executive Summary) as it serves as an introduction to the necessary details and background of your company. For instance, the Company Section could contain this type of information… 

§  How it is formed

§  What your company does

§  How it is organized

§  Your Vision, Mission and Goal Statements

§  History of the company

§  Where it is located

§  How you can be contacted

§  And so forth…

Suggested Format for the Company Overview Section

1)     Company Establishment

2)     Company History

3)     Company Structure

4)     Company Ownership & Legal Formation

5)     Facilities & Locations

6)     Products & Services Overview

7)     Trends Affecting the Company

8 )     Customers

9)     Competitive Strategy

10)  Company’s Strengths & Weaknesses

11)  Company Performance

12)  Company Finance

13)  Company Assets

Management and Operations Section

You can have the greatest business idea or concept but lack the people to execute the plan.  Therefore, the Management Section of the Business Plan is the most important element of the plan and often scrutinized as such by finance sources, customers and your Business Plan audience. This section builds on the Company Section explaining in detail…

§  Who will run the company

§  Who founded the company

§  Who the key employees are within the company

§  How the company will be run

§  What are the specific qualifications of those who will run the company, work in the company, and be responsible for sales, marketing and its strategic direction

§  The specific gaps in Management and talent, providing a plan to fill or overcome those present gaps

§  And so forth…

Example Format for the Management and Operations Section

1)     Employees

2)     Management Philosophy

3)     Management Requirements

4)     Management Gaps

5)     Organizational Structure

6)     Founders / Directors / Principals / Management / Key People

7)     Management Administrative Procedures & Controls

8 )     Decision Making Teams & Processes

9)     Company and Management Objectives, Goals and Strategy

10)  Compensation Structure

11)  Human Resources

12)  Outsourcing

13)  Consultants and Advisors

14)  Products and Services Production and Delivery

15)  Distribution System

16)  Order Turn Around

17)  Suppliers and Vendors

18)  Service Standards

19)  Customer Service Plan

20)  Quality Control

21)  Costs Minimization

22)  Technology

23)  Production and Operation Advantages

24)  Capacity

25)  Safety Procedures

26)  Inventory

27)  Environmental Considerations

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How to Write The Executive Summary Section of a Business Plan

August 26, 2010 by Frank Goley, Business Consultant

Write the Executive Summary Last

The Executive Summary should be written last.  Why?  Because it organizes and summarizes the entire Business Plan. You cannot achieve this effectively until all other sections of the Business Plan are completed. You should develop two types or renditions of the Executive Summary for your Business Plan.  A short version which is 2-3 pages and a longer version that is 5-7 pages long.  The Executive Summary contains the Company Statement, Visions and Mission, the Purpose of the Business Plan and a short summary of each section of your Business Plan, along with a Financial / Profitability Section. You can also provide the key strategic competitive success areas of your Marketing Plan.

The Executive Summary is a Mini Business Plan

The Executive Summary (short version) is part of your Business Plan, giving the reader a quick overview of the important facts contained in your Business Plan.  The Executive Summary (short and long versions) can also operate as a stand-alone document to be used to generate interest in your business opportunity or venture, i.e. to be sent to a funding source to generate and gauge their initial interest.  An Executive Summary can accompany an Investment Overview to provide more details to a venture capitalist about your particular business opportunity. 

Brevity and Inclusiveness are both Key

Brevity, yet completeness and inclusiveness, is key when writing your Executive Summary.  It should be concise yet have adequate detail about your Business Plan.  This can be difficult to achieve if you attempt to write it prior to completing all the sections of your Business Plan.

An Example Format of an Executive Summary

This is an example of the different sections that an Executive Summary can contain. Adjust for long or short versions and for your intended audience.

1.     Company Information

2.     Business Plan Purpose & Objectives

3.     Company Goals & Vision

4.     Company Mission Statement

5.     Company Description

6.     Company Purpose

7.     Company Situation

8.     Founders, Management & Principals Capabilities

9.     Products & Services

10.  The Competition

11.  Keys to Success

12.  Finance

13.  Growth & Expansion Goals

14.  Sales Forecast

15.  Return on Equity / Return on Investment

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How To Organize and Use Your Business Plan for Best Effectiveness

August 25, 2010 by Frank Goley, Business Consultant

I.  Table of Contents

The Table of Contents of a Business Plan is one of the most important elements of the plan.  The Table of Contents should be very detailed, so that the person reading and using the Business Plan can find and access the information needed very easily and quickly.  You can write a great Business Plan with all the necessary information in it, but if you can’t easily find or access that information, then the Business Plan ceases to be a useful tool. 

How to Organize the Table of Contents

The Table of Contents should be organized by each section of the Business Plan and the specific page numbers of each section and sub-section.  It is strongly recommended that a Business Plan be organized as an online document, with the sections and sub-sections hyperlinked to the page where that information resides.  This way you can access information very quickly on a computer online versus having to flip through the paper document to find the information.

II.  Organization

The Organization of the Business Plan is quite important.  The 8 Section Business Plan is in a specific order from which each section builds on the previous section. There is fluid thought and reasoning employed to achieve a Business Plan which reaches its specified purpose- i.e. to run a business, to buy a business, to expand a business, to enter a joint venture, to finance a business, to complete a particular project.  Although the Executive Summary is the first section of a Business Plan, the Executive Summary should be written last.  With the exception of the Executive Summary, all the other sections should be written in the order they are listed. 

Business Plan Format

Remember that a Business Plan is a Business Document; you are NOT writing prose.  It should contain a very precise and concise format and be organized into numbered sections and sub-sections, which contain specific information in short, paragraph form. Business Plans should be written in paper form, computer format and online format.  Computer Format means the Table of Contents are hyperlinked so you can easily access certain information quickly and precisely in one click on your computer.

Sharing the Business Plan

You should have your Business Plan published securely, online (via password access) so that certain key managers or employees can access and manage remotely.  Also, you can use an online Business Plan to attract funding for your venture. You can have different versions accessible online for particular purposes. For example, you could have your Marketing Plan accessible remotely so your Sales Manager can update it or refer to it while in the field or on an important sales call.  You could have a funding version of your Business Plan accessible online for angel investors or venture capitalists to view your opportunity. 

The Business Plan is a Living Document

A Business Plan is a dynamic document, as it changes on a daily, weekly and monthly basis.  By being able to access it on your company computer network and / or online, the CEO, Executives, Management and Key Employees can update it easily and effectively.  For a Business Plan to be successful, it must be intertwined into the fabric of your business and implemented through the Strategic Plan.  Having the Business Plan organized with Hyperlinks with highly organized sections and uploaded on your company’s computer network and accessible online, allows the Business Plan to become a “living” document which can effectively:

1.     Run a business 

2.     Be readily changed, adapted and updated

3.     Be a sales tool

4.     Obtain funding

5.     React quickly to market changes

6.     Give you the ability to make realistic forecasts and projections

7.     Seize opportunities

8.     Keep your Competitive Advantage. 

Keep Your Audience in Mind

Organization of your Business Plan is KEY to its effectiveness and utility.  It is important to remember that too many Business Plans are written from the perspective of the Business Owner.  When writing your plan, remember your audience extends beyond you, the Owner.  Don’t neglect your Managers, employees, customers, the marketing aspects and the potential investor elements.  This is also why I suggest writing one Comprehensive Business Plan to run your business and develop other Specific Purpose Plans for different audiences, i.e. a Customer Plan, an Investor Plan, a Lender Plan, a Strategic Management Plan, a Marketing Plan, Supplier Plan and so forth.

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