I have written my fair share of business plans. I have reviewed them, and judged them and looked over various investor pitches including them. I have been contacted by multiple businesses looking for them. And over the past fourteen years, I have questioned the necessity of them. There’s a huge misconception that every new business needs a business plan in order to be taken seriously. Companies that have no real reason to have a business plan spend money unnecessarily on their creation. I see it all the time — “URGENT! I need a business plan written immediately! I can pay $100 for you to write 10–12 pages!” Realistically, many of these companies need business plans the least.
STOP UNDERAPPRECIATING THE VALUE OF YOUR PLANI want to call out every business that ever tried to pay someone to write their business plan for them for a low amount of money. Your business plan, when you need one, is your first sales opportunity. That plan, with all of its required, formatted, and structured information, is your first impression to investors who may or may not fund your idea. Are you really willing to allow the lowest bidder to have that much control over that initial impression? Besides, in order to get a professional plan, you have to pay for it, and $100 is not going to cover it. In the event that you truly need a business plan, budget at least $50 per hour for it, and be prepared to be an equal partner in the preparation of the entire plan. An absentee business owner in the business planning process is noticable to investors, and they will never fund your business if they think you didn’t put in due diligence into your business plan.
STOP UNNECESSARILY OUTSOURCING WORKI want to touch upon why a company would consider outsourcing their business plan. Imagine that you are a business owner that has put countless hours, blood, sweat, and tears into your idea. You have bootstrapped and built, acquired customers and failed, and now you have reached a point where you have proven yourself and your company enough to pitch investors for funding. Are you willing to outsource your business plan, which is a reflection of the work you have put in so far and the promises of what you are willing to do to grow your company? If you are, evaluate your reasoning. Is it a lack of confidence in the writing and pitching process? If so, you might be better working with a consultant to build your business plan rather than outsourcing it. If it is due to a lack of time, then you need to reevaluate your priorities. Like I said, this document is your first impression to potential business partners and investors, and if you don’t have time to craft that message yourself, then there might be an opportunity for you to outsource other areas of the business so that you can focus on creating your plan.
STOP ASSUMING YOU NEED A BUSINESS PLANI want to remind businesses that not every one of you is seeking funding, therefore, you don’t need a structured business plan. If you feel like you need a more organized visual of your company, look into creating a business model instead. A business model puts all of the fluid parts of a growing business in front of you, so that you can test and adapt your business to fit what works. The basis of the business model is to see what you are doing, for what market, and how it is working for you. You put the information on post-it notes so that when something changes, you aren’t digging into a certain section of a document, you are pulling the note down and swapping it with the current information. It is a living part of your business, rather than a rigid document living on your computer.
Business plans take time, effort, and experience to craft them properly. That said, most investors hate them. They are boring and the information is typically fabricated. There is no passion shown in its pages, and most businesses seeking investment funds are high-risk, so even with twelve pages of thought out plans, there is no guarantee of success. Investors invest in people, not ideas or papers, so put in the time to craft your personal brand, level of expertise, and love of what you are doing. This goes much further than a “must-have” document. Infuse everything you do and write for your company with a strong brand built on purpose and proven need, and you might have a chance. In the meantime, stop posting want ads for low dollar business plans. They are offensive and will get you no where. Invest that $100 into a consulting session and a template — you will get farther.
If you need help deciding on where you should be putting your money in your early-stage startup, I can help. Finances are tight, but investing in someone who has experience starting and growing businesses can move you ahead quicker, without wasting so much time and money on things that don’t work.