I was asked this question on Twitter yesterday and I can’t resist answering it here: “What should I pay a consultant to develop a business plan for my company?”
Start, please, by reading about my worst ever consulting engagement. That’s an old story now, about how one startup team misunderstood the place of the plan and the consultant, but it’s as true now as it ever was.
The moral of that story, which I really hope comes out loud and clear, is:
Never think of a business plan as a use-once document. It’s not a hurdle you get over. To make your company work you’ll need planning, not plan, and it’s best used like a steering wheel to manage your business.
That worst-ever engagement was my first in business plan consulting. I made my living as a business plan consultant, mostly (there’s almost always a mix of engagements when you’re on your own as a consultant) from 1983 through 1994. I learned fairly quickly that the best business plan consulting was done looking over the clients’ shoulder, making suggestions, asking good questions, facilitating, contributing to the clients’ planning process. Not writing a plan.
So my first answer to this question is this: don’t pay a consultant to develop a business plan. Do it yourself. And don’t think of it as a fancy polished document printed at Kinko’s and coil bound to be presented to investors once and then forgotten. Make your business plan short and practical and just big enough to cover for yourself your strategy, review schedule, milestones, tasks and responsibilities, and basic numbers including sales, costs, expenses, and cash flow. The plan is what’s going to happen. Do it organically, keep it on a computer, and expect it to change.
Think of that document as output of the real plan. Its just a snapshot of what the plan was on that particular day. You’ll be changing it regularly for as long as your business still exists. And in many cases it’s not even a document, but rather a pitch presentation – which doesn’t mean you don’t plan, but rather, that you customize the output to match the requirements of the moment.
You want a consultant? Do you have the budget? Get somebody who’s been through the startup process, raised money successfully, knows what works and doesn’t, and is willing to work with you providing that kind of expertise. That’s what’s usually missing. Not just writing a plan.
I have more on this for tomorrow.
As I believe Truman once said:
“The plan is nothing. Planning is everything.”
It’s about the process, the discussion, the exploration, the open questions. It’s not about the document.
You are making a great point here. As a Business Plan Consultant, I tell customers that they should consider hiring me for three main reasons:
1) To use a proven business planning process
2) For the business experience
3) To help in the implementing, tracking and adjusting the plan
The benefit from a business plan is not the plan itself but the Process a company went through in developing the plan. The process is highly beneficial in running a successful company. Of course the written plan helps a business do important things like raise capital or attract a JV partner, but I find too many entrepreneurs who concentrate too much on the end product than the process. A good business plan consultant provides a proven process that asks the business owners the right questions to find the important information needed to run a good company and develop a solid plan. It is necessary to have the heavy involvement of the business for the business consultant to produce a solid plan.
Hire a business plan consultant for the Experience he or she has. It is the experience, combined with the business planning process, which brings solid advice and results. The combination of business experience with a good business planning process provides an exceptional level of business planning and a good long term relationship for the benefit of the company (i.e. plan implementation help, plan reviews, plan changes, etc). You want a business plan consultant who is also a business consultant that can grow along side the company as it proceeds with the plan.
Hire an experienced business plan consultant to help with the Implementation of the plan. Like Tim said, a plan needs to be woven into the fabric of the company as a guiding tool for the success of the company. If the plan isn’t implemented, it doesn’t have any benefit other than collecting dust on the shelf. Implementation experience, tracking, and making changes as you go is soooo important in really using a business plan successfully. A plan should be used on a daily, weekly and monthly basis, with tracking and planning meetings monthly to start and quarterly later on.
Thanks for the post Tim!
This is something I teach in my classes, that a BP is a living document and you should review at least once every six months. You can always update and change your goals towards your business.
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