“The one who adapts his business to the times prospers, and likewise the one whose business clashes with the demands of the times does not.”
Discussion and articles about creating business plans tend to focus on plans for new businesses. While most new businesses require business plans, existing companies may require them as well. Sometimes this is to seek additional funding for expansion of the business or to take advantage of an opportunity. Management of your operations, promotion of your business, and articulation of your objectives all depend on developing a good plan. Think of it as a road map for your business, helping you determine what resources you will need to make a profit.
Business Plans for New and Existing Businesses
Whether New or Existing, both types of business plans should cover the customers the company will target and the competitors it faces. Both should detail the marketing and operations plans for the business. Both should delve into the financial targets for the business, on both the revenue and cost sides. This information presents either funders or employees with a clear idea of what the business intends to do.
Whenever a plan must be presented to external funders for consideration it must be a formal document, carefully formatted and proofread thoroughly. A business plan for an existing business should include actual financial statements along with pro forma statements. This allows for pro forma statements to be based both on plans for the future activities as well as reasonable extrapolations from past performance. New businesses have no financial records to pull from and can only take educated guesses based on the market they are entering.
Do It Yourself vs. Hiring A Consultant
There is plenty of information and resources on how to write a business plan. If you find the accounting jargon intimidating, you are not alone. As long as you can clearly get your message across an have other people such as your accountant look at the plan before it goes to lenders and others, you can pursue the do it yourself route.
The learnings from the business planning process will help you develop analytical thinking skills necessary to run your business with an intimate understanding of your own business model; it’s an invaluable business experience.
You need to understand your plan inside and out and really understand the variables involved. “What will you do if only half your expected revenue comes in?” These are the tough question that you and your plan will have to answer.
One of the most important jobs of an entrepreneur is to manage time, and do those things that your 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 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.
Some reasons to consider hiring a consultant; It will get done! Business planning is done much faster with someone who knows the process. Another consideration is that it will get done in a way financial professionals will respect. Finally, the consultant’s objectivity will allow for non-emotionally-based projections and expectations for the business. A consultant will be much more objective in the process and question your assumptions, making it less likely that the business will have problems after the funding comes in.
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.
An optimum solution is a blended approach. At best the planning process should not be at either end of the spectrum. 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.