One Size (And Price) Fits All Business Plans

How long should your business plan be?  How much should you pay a consultant to prepare it? 

Excellent questions.  Difficult answers.  Two primary factors.

First:  Your business concept, marketing plan, or other any section may be very easy to describe. 

If you want to open a burger joint that specializes in lots of mustard and really fast service, it probably doesn’t require many pages to describe your product.  On the other hand, if you’ve invented a machine that incorporates multiple patents, performs multiple functions, or is in some other way complex, your Product Description may be lengthy and contain component lists, patent details, and schematics.  You could devote much of the business plan to this section alone.

Your personnel may involve multiple officers and other key personnel with miles of qualifications and experiences.  This makes for a longer Ownership Summary and Staffing Summary.  If you’re planning to quit your Assistant Manager position at Fred’s Burger Barn to open a drive through with your boyfriend you may want to keep these sections brief.

This rationale may be applied to nearly any section of the plan.  Some companies will market themselves in a hundred ways.  Some will simply run a classified in the local weekly.  One Marketing Summary will be significantly longer than the other…and so on.

Second:  Different business plans target different investors.  Institutional investors may first want to first see a bullet point summary of your concept, operating assumptions and value.  Or perhaps it is more appropriate to send them an executive summary.  Regardless, if they are interested in your project you should expect to send them a more detailed business plan than you might send to your rich uncle.  Your relatives know you and don’t need to see nine pages articulating your expertise.  Institutional investors will want to see a more detailed presentation of your financial forecast.  Depreciation assumptions, tax considerations, and most likely five years of projections for Income, cash flow, and balance sheet Items. 

If you’re borrowing a large sum of money you can count on providing a detailed business plan with an explicit forecast for income and cash flow for three years.  For smaller sums, depending on the lender, a brief business plan with a basic forecast of cash flow for three years may suffice.  Again it depends on how briefly your project can be described.

Regarding the price you should pay for a business plan, one thing is clear:  Longer business plans are not necessarily better business plans, nor any more difficult to write.  In fact, the easiest way to write a long, impressive (to the business owner – not the investor or lender) is to pack it full of charts and graphs that add little or no value.
Unless the plan is for management use only, the purpose of the business plan is to create interest in the investor, banker or relative – not to cover every detail of the project.

In summary:  When writing a business plan yourself - strive to be brief and interesting rather than detailed.  When choosing a consultant to prepare your business plan, you should look for a professional that asks questions and seeks to understand you and your project before quoting you a price, length, or timeline for your project.

EPIC Business Planning regularly works with banks, Economic Development Districts, institutional investors, and the SBA to obtain funding for our clients.

Review our record with the BBB by clicking on our link to the right. We are a working partner with the Small Business Administrations - serving as a Technical Assistance Provider (TAP program).

Contact EPIC for a complimentary consultation

epicanalyst@epicplanning.com or toll free: 866-718-0092

Copyright 2007 - EPIC Business Planning