If you are raising funds for a start-up or to grow your business you will need a business plan - one that includes a financial forecast and a well written commentary. However, what is the best way to improve your chances of persuading a bank or investor to part with their hard-earned cash? Write the plan yourself? or get someone to do it for you ?
Writing Your Business Plan Yourself
For micro businesses raising small amounts of investment (say under £50,000) this is likely to be the best approach. Apart from anything else it doesn’t make sense spending 10% or 15% of the funds you are trying to raise on getting someone to help you write a plan! Most high street banks offer on-line applications or software templates to help you. Just beware that you may have to repeat the application process several times in different format if you don’t have a stand-alone business plan.
For larger businesses too there may be value in writing your own plan. If you write your own plan then you will know every detail of it which will help you when questioned by a bank or potential investor. Everyone wants to avoid those embarrassing moments played over and over on Dragon’s Den where the entrepreneur looks vacant when asked for details of their gross margin or net profits in the first year of trading!
Writing your own plan might also show your all round commercial ability to appreciate all aspects of the business and with that there is a good chance that you will understand how to drive it towards success. Business Plan Software & templates abound on the internet to support this approach and there are plenty of “Do’s and Don’ts” published free to guide this process.
The draw backs of this approach are that many people do not have all the financial, sales, marketing, operational skills and experience necessary to construct a good business plan. They may also lack the ability (or time) to integrate them into a solid business case. Some people may not have the writing skills to bring the plan together. Finally, some people may find themselves “too close” to the business to clearly and simply convey the business opportunity. Weakness in any of these areas may reduce your chances of securing funds.
Business Plan Writing Services
The alternative to DIY business planning is to get some help from an experienced hand. Historically accountants and sometimes solicitors as well as independent copywriting services have offered these services.
However, there are now an increasing number of companies specialising in providing business plan writing services. These companies bring specific independent expertise to the table. As well as writing skills they can have a broad base of commercial experience including financial forecasting and by nature of their independence can provide an objective perspective on your business.
As well as offering business plan writing itself (both financial forecasting and the written plan) they may also offer help with “pre-business plan” research and feasibility and “post-business plan” introductions to potential sources of funds.
When selecting business plan writing services there are a few good guidelines worth following:
1) Commercial Experience - The ability to write well is not enough to make your plan investable – this is not simply a copywriting exercise. If you are going to secure funds you need to construct a business case that integrates all commercial aspects of your business. So, be sure that the people writing your plan have several years of senior commercial experience – the broader the better. This commercial experience should include budgeting or forecasting – your financials are a critical part of your plan.
2) Track Record – Many business plans are confidential so do not expect to see many examples. However, companies providing business plan writing services should be able to provide written and attributable testimonials from clients.
3) Pricing – Services range from around £2,000 for small start-ups upwards to £15,000 for larger corporate plans. As with most things, you get what you pay for and the price generally reflects the complexity of the business model. Make sure you ask for a specific proposal that outlines exactly what you are going to get for your money, the timescale and price. Consider “virtual services” rather than “face-to-face” consultants to reduce your costs but not the quality of work.
4) Ownership – one potential disadvantages of having a business plan written for you are that you will not “own” the business plan and be totally familiar with it. So, ensure that you are fully involved in the process and that there is time scheduled for you to review and discuss the financial forecast and written plan with whoever is writing the plan for you.
5) Funding – Have plans that they have created secured funding? Whilst funding depends on a wide variety of factors and not just the quality of the business plan (state of the market, availability of capital, product, service, proposition, management team etc.) any specialist service should be able to quote a few examples where their business plans have helped to secure funds.
For most people who do not possess experience of writing business plans you may improve your chances of securing funding by engaging a specialist business plan writing service to help you create a plan. However, make sure you are fully involved in the process – you need to own the plan at the end of the day and know it inside out and backwards - your future is in your hands not theirs!
The Business Plan Team
- Jon Hunt is the Lead Consultant for The Business Plan Team which works with growing businesses, entrepreneurs & start-ups that need help developing a professional business plan to secure funding and guide internal management. It has developed business plans for a wide range of businesses and corporate clients looking to raise funding of between £250,000 and £200million in many different industry sectors including Social Media, Retail, Construction, Mining, Renewable Energy, Technology, Healthcare, Interior Design, Sport & Leisure, Investment Banking, Wealth Management and Trading. Testimonials from these clients illustrate the high levels of service TBPT provides.