10 Jun Need a business plan? DON’T do it yourself.
While entrepreneurs and small business owners are increasingly told that writing a business plan is a DIY task, in reality, a business plan is a technical document. When written well, it that can be a tool to fuel growth. Like filling out tax forms, business plan writing is best left to professionals, leaving owners free to focus on developing their business.
Why do engineers build bridges? Because if bakers built them, they would probably crumble like cookies.
Any entrepreneur can talk with passion about his or her business, or his or her idea for a business. They can convince friends, family and fools (those classic early investors) to support them with the power of their passion. But once that business starts to need real capital to evolve, passion alone will not get a loan application approved and might not convince a venture capitalist to pull out a checkbook.
A key component to successfully raising funds is a business plan that says: “Wow!” And while an entrepreneur can likely write parts of it, the most crucial components of a successful business plan are best left to professionals with the tools and skills to make it shine. Any convincing business plan must have (among other things) up-to-date and in-depth market research as well as very detailed financial modeling to clearly show investors the opportunity before them.
Neither research nor modeling are jobs for amateurs. Top-shelf market research is expensive and financial modeling requires deep financial literacy.
Bankers and investors read business plans all the time. They know what to look for. And that cuts both ways. If your market research is outdated or pulled from a random source you found online, that will stand out. And embarrass you.
The same is true of financial modeling. Most entrepreneurs are not finance gurus. VCs and bankers are. Sloppy and unprofessional modeling will make for a sloppy and unprofessional business plan. Securing investment is easier when your business plan stands out in a good way.
Building or growing a business requires capital, and a business plan is the best tool for securing it. The DIY method of business plan writing not only typically results in a poorly written plan, it also steals precious time away from business development.
Owners and entrepreneurs need to focus on nurturing and growing their enterprise. Spending months scouring the internet in an attempt to conduct market research or re-teaching yourself complex math in an effort to create a financial model is time wasted in the worst way. Most DIY business plans are not worth the paper they’re printed on. Bankers know it. Investors know it. Entrepreneurs need to know it.
Hiring a professional to write your business plan may seem expensive at first glance, but it is an investment that will pay back dividends and let you focus on what’s really important, developing your business.