What You Need to Know Before You Hire A Business Plan Writer
Entrepreneurs are a busy bunch. This is a fact and with good reason, starting a new business venture takes a lot of time and effort. If your expanding your business venture, chances are that you and your managers simply don't have the necessary time to devote to completing a full expansion business plan.
Although the business planning process is necessary, you might be a little too busy to be bothered with the details.
On the other side, some businesses will need the expertise of a business consultant.
Imagine a huge operation that requires multi faceted manufacturing plans or operational plans. Larger operations will require a professional touch because the size of the operation is just too huge for one person to undertake.
If you don't want to complete the business plan yourself, there is an option you might want to consider and that's to use professional business plan writers.
Good plan writers can be a huge asset when your starting your business or expanding your business. Professional plan writers can possibly save you hours of wasted time.
This process will keep going until you either get it right, which can take months, or you give up in frustration, whichever comes first.
Experienced plan writers know this and will more than likely get it right the first time. This can save you months of wasted time so you can get your business up and running sooner rather than later. Plan writers can certainly be a benefit.
However, I will tell you right now that...
It's Hard To Find Good Business Plan Writers
Yes, it's true, finding good business plan writers can be very difficult. I deal with plan writers on a daily basis and let me tell you, business plan writers are not all created the same.
Sadly, it's been my experience that there are more bad business plan writers and consultants out there than there are good ones.
You see, anyone can call themselves a business plan writer or business consultant without any prior experience whatsoever in business or plan writing.
It's downright frustrating to deal with a plan writers who charge big bucks for a job that any Joe off the street could have done . Let me give you an example of a recent business plan that I finished reviewing.
I received this business plan from a client who paid $10,000 for it's completion. I took one look at this plan and shook my head. I didn't even have to look past page one to know that this plan was a complete joke and that this client got ripped off.
The first three pages were absolute rubbish with no coherent meaning whatsoever. After page three it jumped right into the appendixes.
There was no executive summary, product description, marketing plan or strategy, operational plan, management plan or anything else that makes a good business plan.
The financial plan was a complete mess. The statement included a quasi cash flow and income statement combination with no balance sheets. The numbers were meaningless with no background work whatsoever.
The business plan writer thought he would spice up the presentation by colouring the financial sections with a bright yellow and blue background.
I sincerely felt bad for this client because there was no way this plan would be funded. The business plan would have to undergo some serious reconstructive work and not to mention the $10,000 that the client was out. This money could have been spent on the business.
I asked the client how he got this joke of a plan writer to complete the business plan and he mentioned that his friend recommended him.
He went in completely blind without doing any background checks on the consultant. In the end, he paid out $10,000 (up front) for a business plan that wasn't worth $10.
Sadly, this is not the first plan that has come across my desk from poor business plan consultants and I'm sure, it won't be the last.
However, after reading this article, you will know exactly what to look for in good business plan writers and go into this process with your eyes open.
Here's what you want to look for in a good business plan writer:
How long has the business plan writer been doing this? Are they experienced business plan writers? Experience is a must for business plan writers. Personally, I want to see someone who has at least 4 years direct (successful) experience in the business planning field.
Has the business plan writer been formally trained in this area? Particularly business? Make sure the business plan writers have been trained in this area or a very closely related field. I would make sure that the school is accredited and not some fly by night operation.
- What designations do they have?
Does the business plan writer recognized by a third party organization? Are they certified management accountants? Chartered accountants? MBA's?
If a business plan writer doesn't have a portfolio, don't bother dealing with them. Good business plan writers will have a business portfolio and resume prepared. When you look at their portfolio, make sure there are references.
- If at all possible, look for direct business experience in business plan writers
Business plan consultants all too often don't have any business experience whatsoever. This is not good sign. How are they supposed to understand the business process and convey that on paper when they don't know themselves?
Ask the business plan consultant how long he/she has been in business, and if they've had any other business experience such as owning a business. If they owned a business in the past, ask what happened to it. If it was a success, great, however, if it failed ask why it failed. This is important.
It's been my experience that plan writers who understand the business process write the best plans. Plan writers who have a poor understanding of business fundamentals don't hand in very good business plans.
Most entrepreneurs are under the impression that business plan consultants charge according to the size of the job. Of course, this is taken into consideration but the cost is directly associated with the experience and education of the business plan consultant.
These two should go hand in hand because the more experience and track record a plan writer has, the more it will likely cost you. Like I said, it's hard to find good business plan consultant and when you do, it will cost you.
Make sure the business plan consultant has references. Make sure you can contact those references. The references should be past jobs and the jobs should be arms length. I would contact about 3 references and would make sure they weren't close family.
- Are the business plan writers a part of a recognized business association?
Does the business plan consultant belong to a professional and recognized business association? If they are going to prepare financial statements, are they qualified to do that work?
- Referrals are great but make sure your don't go on someone else's say so without checking the business plan writers work
All to often, someone is referred to such and such business plan consultant who turns out to be a complete quack. Make sure you do some background work on the plan writer.
- Payment schedules with business plan writers
Never pay out the full amount of cash up front. Let me repeat this... Never Pay Out The Full Business Plan Costs Up Front! The payment schedule must be done in phases. The most you should be paying up front is 25% to 35%. Never pay the 100% up front because you can wind up with a crappy plan. If a business plan consultant wants the 100% payment up front, get rid of him/her. Trust me on this one. Good business plan writers know this process and will ask for 25% to 35% up front and will do your business plan in stages.
The plan should be phased according to the sections completed. Personally, I want to see the business plan in three phases. The first phase is the summary information.
Make sure that you sit down with your plan writer at each section and discuss in detail the in's and out's of the plan so your in the loop the whole way. It might be a good idea to let an experienced business person take a look at the business plan.
And always work with a contract with complete terms of reference from the business plan consultant. Never hire a business plan consultant without going over the contract and terms of reference. If the plan writer has no terms of reference, get out of there.
Before any money is exchanged, both parties must sit down and go through the contract. You should understand the material completely and feel completely satisfied. Once you are satisfied, both parties sign the contract with a third party and a copy is made for yourself. Trust me, if things go sour, a contract will come in handy when it comes to legal back up.
These are some of the main points you will want to consider if you are thinking about hiring a professional business plan consultant. Remember, you want a business plan that gets the results you are looking for. This is the bottom line.