- How long does it usually take to do a Business Plan?
- What topics are covered?
- What about the business planning software you can buy in the stores?
- What does a Business Plan cost?
- What is the price of not doing a business plan?
- What is the reason for most starter company failures?
- I’ve done my Business Plan. Now what?
If done properly, a Business Plan will take between 30 to 50 hours to complete (my portion is between 10 and 24 hours). The actual average for completion time ranges from three to six weeks due to the research involved by both parties.
The number of topics vary, but usually they range from 30 to 50 different topics on an average. Topics include the services you offer, who (and where) your competition is and how you are different from them, your business structure, your management team, marketing, personnel, your exit plan, financial topics and many more topics.
There are many differences! Most are very difficult (if not impossible) to customize properly the financials for your situation to take into consideration all of your products or variables to your operation. I have also found errors in the calculations! You may be an expert in the business you are going into, but most people are not accountants and leave a lot out of a self-done Business Plan and our plans are usually a lot more accurate.
If we do primarily the financials and the binding of the Business Plan, it usually costs between $2,500 and $6,000 depending on the complexity of your situation. We see an average in the $3,500 to $5,500 range, but we have done many for $2,500 to $3,500. We can also review a self-prepared Business Plan and identify corrections needed for between $500 and $1,000. This will be your best investment into your company!
Usually, the cost of failure! The Small Business Administration has quoted that between 80 and 90% of new businesses fail within the first five years. Out of these failures, about 70% of failed companies did not do a business plan!
The other 30% did a plan but usually didn't follow it.
The number one reason for the failure of start-ups is due to running out of money. Probably the main next main reason is due to failure to plan properly. If you plan properly, you will know how much money you will need. When I first discuss the business plan with a client, I ask them how much money they think they need to get their business started. By about the same percentage as the failure rate, the correct answer is usually double what they tell me!
- First and foremost, do NOT put it up on the shelf after you get your funding, never to be looked at again! The Business Plan should be your operating Bible for the next three years! Enter your Business Plan budget numbers into your accounting software so that you can compare your actual results to your budget (Business Plan) and then analyze your variances.