Business Plan Flexibility

Unlike so many so called business plan experts and Web sites that put business plan writing and development into a neat little box or template, my team understands the need for flexibility in preparing business plans, both in length and the type of detail needed based on a myriad of factors. There are always exceptions to the rule, like a couple of business plans with a celebrity principal with deep pockets that received seven-figure equity commitments from a PowerPoint presentation; but flexibility aside, nearly all companies seeking capital need a concise Executive Summary, a detailed Business Plan to support the Executive Summary, including Financial Forecasts, Financial Analysis, Marketing Plans, Competitive Analysis, Market Share and Penetration, and other key components.

Since investors usually prefer to see an Executive Summary first, and less is often more in a Business Plan until serious interest is evoked, another aspect of flexibility comes into play for many companies such as developing the business plan in phases to save time and money as investors’ interest is gauged and secured। So many factors come into play, so do not fall into the traps of a template or writer's “cookie-cutter” business plan, missing key information, providing too little content in key areas or excess unneeded details in areas that are not important to your business focus.

Yes, flexibility is important, so that you avoid mistakes like completing your plan in a virtual vacuum or hiring a low-cost writer that does not understand the investment community, and make the right decision by hiring a professional expert team that may cost a bit more.

Financial Forecasting

A careful analysis of the cash flow needs of your business on a month-to-month basis for one or two years is vital to an investor's consideration of the prospects of your business. A potential lender or investor wants to confirm that your business has a high probability of success so that their loan will be repaid or that their equity position has an upside...and that operating capital is sufficient and well spent. We often see financial forecasts done solely on an annual basis; however, that format does not adequately show the working capital required to ensure the short-term or long-term viability of your business. Furthermore, the assumptions utilized to create the financial forecasts must be turned into thorough notes that correspond to the income and expense line items shown in the income statements and cash flow analyses. Market studies are almost always necessary in order to make the correct revenue assumptions.

A Business Plan without comprehensive and summary forecasts supported by market analysis is almost certainly a plan that will not succeed in raising capital.

Full Disclosure is Always the Best Approach

When writing your Business Plan, or any component thereof, it is always best to look at your business as though you were an accountant or attorney hired by the potential investor or lender. “No surprises” should be your motto. You must anticipate every reasonable inquiry and ensure that your Business Plan addresses all possible issues. All claims made in the Business Plan should be substantiated through research and documented in the Plan, Financial Forecasts and/or Appendixes. The easier you make the due diligence process for the potential investor or lender and its advisors, the quicker you will be notified of their decision, with the likelihood of a positive conclusion magnified.

Business Plan Costs Vary!

So many people respond to out our advertisements and ask "How much does a business plan cost," not realizing the variables that could result in a thesis for an MBA on the topic!

Obviously, the type of business in the primary factor in costs, as well as purpose such as if the business plan is an internal document or for raising capital and how much. Companies with history and a great financial statement or assets need less detail that a startup when a capital raise is the goal. Assuming a market study is needed, the requisite scope may be local, regional or national for the competitive analysis and the market share and penetration analysis. If your business concept involves new, unproven technology, we may need to conduct more intensive research to properly write certain sections of the Business Plan. If you have drafts of the Business Plan and/or Financial Forecasts, including a cash flow analysis available; the quality and completeness of the draft documents will greatly affect our fee. If we are completing documents from scratch, the fee would be more than if we co-authoring with our client.

We have completed Business Plans ranging from five pages to over 80 pages, plus appendixes, and these Plans have been used to obtain funding commitments ranging from $60,000 to $75,000,000. Hence, our fees for Business Plans have been as low as $650 and as high as $75,000. That said, 80% or more of the Business Plans we complete cost between $1,250 and $5,000.