A business plan is central to most business activities, however small the business, in some cases it is essential, in other cases desirable, the benefits of preparing a business plan are:-
1) A plan clarifies the direction of the business and ensures that all bases are covered.
2) If funding is required it is essential to the funding provider to gauge the profitability viability and strategy of the new company or business.
3) Often it is educational to the entrepreneur, even if others prepare the plan, the involvement of the instigator ensures he or she knows the complete picture. A good advisor will share the information with the client and ensure he is familiar with all aspects of the plan.
4) A plan shows professionalism to those who will be involved in the business.
5) Much better to model the business and make any mistakes on paper rather than in the business making mistakes with real money.
So do you prepare it yourself or ask a professional? If you are an MBA probably you would prepare it yourself, although even in that case, the business plan requires many more skills than financial aptitude. Important areas such as Marketing, Sales, Strategy, Costing of product etc. require specialist knowledge, usually provided by a professional business plan writer.
Many plans only contain financial information and very little else, these plans are useful to accountants but in order to receive funding from banks, venture capitalists or possible business partners a full description of the business is required, in effect how you are going to run your business.
How will it be prepared, specialist software or with Word and Excel?
Both methods have their plus and minus points, the leading software on the market by miles is Business Plan Pro, this package has been developed over many years and is now the defacto standard. Many professionals would not use Business Plan Pro.
Business Plan Pro is rather inflexible and time should be taken to learn the use of the program properly. I have seen many BPP plans that look terrible as people have tried to fit in what they thought should be included. Don’t jump into the program, go through the very good training and help modules thoroughly first.
If you complete your plan personally, the people you are submitting the plan to will normally be able to see that it has been prepared using BPP, this will not detract from the information, but don’t give the impression you constructed the plan yourself from spreadsheets and a word processor.
If you are using Word and Excel, then firstly either obtain a good business plan template with cash flow, profit & loss, balance sheet, capital equipment and all the sections you will require. Or I would suggest construct a template yourself, this will be a considerable amount of work although, if you are not an MBA or similar, learning to construct the spreadsheet and the calculations required will be a very good exercise and once completed you will have far more control over your plan. Having the knowledge on how the financial part of the plan is constructed makes the plan far more coherent.
So software or Word and Excel – I would suggest if the plan is only for your use the possible use the software. If the plan is for other people and particularly investors, then either Word and Excel or construct the plan with the software and then transfer to the other method to polish it, include items that may not fit into Business Plan Pro and polish the document.
If you need more information on constructing business plans visit www.entrepreneur-ideas.org