When Going for the Lowest Price for Business Plans Backfires
No matter if you’re planning on using the software or a template of the industry business plan sample, no matter if you’re going to try it with a discount business plan consultant or if you think about putting something together yourself: If you try to do it the cheap, quick and easy way at the price of quality, you will have a bad time. And here’s why.
There is purpose in sound business planning even if most entrepreneurs would rather not have to deal with it. Without the bureaucratic requirements of the business plan that banks, governments and grant institutions implemented widely about 15 years ago, surely there would be a lot less business plans written. But the business plan requirements were introduced with a reason! This reason is that a good business plan lowers the probability that businesses will fail and cost either their investors and lenders or the government a lot of money- money that should, for the greater good, be going to businesses with a fair chance of survival.
If your business plan was written by someone who just had the lowest business plan writing costs in mind in an attempt of baiting price shoppers, usually their business plan will contain a lot of fluff. Fluff is a sure-fire sign someone tried to just lay out words in a hurry. A lot of very general statements, lofty phrasing and generous spacing around extensive tables and oversized figures and diagrams leave the business plan recipient with many questions to ask. Or worse, only one question: How can I make sure this applicant never contacts me again?
It is incredible how a document that is to give the founder hundreds of thousands of dollars or more of funding could be allowed to contain orthographic errors and weak grammar. Heterogeneous formatting, an irregular structure of business plan components or complete absence of visual elements are also indicators of a low business plan quality.
The by far biggest flaw however is a low total volume of words. A good business plan should have at least 3,000-5,000 words for an investment sum below US$200,000 and 5,000-8,000 words for investment volumes up to half a million dollars. 8,000 to a maximum of about 15,000 words (that’s 50 pages, the absolute maximum any written portion of a business plan should be except if otherwise stated by clearly outlined recipient requirements) for enterprises with capital needs above US$500,000. The business plans can also fail for being too voluminous, too technical and not containing enough story elements, but it is far more likely for an investor to be turned off by an extremely flimsy business plan draft.
Why not Every Author is Also a Good Business Plan Author
Some people think that a good business plan writer can be anyone who can write well. However, to be a good business plan writer takes a lot of things coming together. Not only do you need a sharp business mindset to make the most out of the business concept that is presented by the founder, but also do you need to be a seasoned researcher and able to interpret financial plans. Learn more about how to hire a professional business plan writer and see how to assure your maximum benefit.
This is a skill set which overwhelms not only most people who want to be founders, but even amateur would-be consultants who try to provide professional business plan writing services. But really they are maybe journalists, ghostwriters, business students or copywriters, lacking both root in the respective academic background as well as enough practical knowledge to understand the voice and tone the business plan will need in its specific niche industry to have to interest the recipient.
Few business planning consultancies like to talk about it, but the rate of success of your average business plan is surprisingly low. Experts assume that only 8 to 12% of all business plans achieve their respective goal when it’s about funding and even when overcoming bureaucratic hurdles only one out of three business plans is accepted at first sight and roughly half are rejected straightaway. That said, it is unfair to make business plan consultants directly responsible without knowing more about the business case. Your average founder usually has his head elsewhere and will rarely prepare in sufficient degree for their funding interviews and many times will blow it even as the business plan could have succeeded, maybe with a few clever tweaks and squeezes along the way.
Talking about correction loops: Sometimes we get inquiries marked urgent from founders who are in a real tight corner to have their business plan written or to make touchups to a plan which was rejected. Even if we at BrainHive are one of the fastest business plan consultancies out there, it’s always a better idea to avoid having to rush things because polishing and honing your business plan is best done with enough time before it needs to be submitted to its recipients.
Conclusion: “Cheap” is Relative When you Pay Twice
Apart from the fact that a bad business plan can cost you a lot of hassle because you will essentially be wasting your time doing the research and the outreach to the business plan recipients, you will also burn these contacts or you will have to pay twice to get a decent business plan written even if they give you a second chance. The mere cost of using a business plan consulting service or to sit down and do the studies and the work necessary to write the business plan yourself is a joke compared to the financial and emotional cost of either you business failing or maybe never getting off the ground.
Try it out, if you do not believe me. In my next article I will list some of the options that you have to get a free/cheap business plan and I will also list all the business plan libraries and free business plan template collections that I know. Likewise, I will list some of the business plan consultants which expressly advertise their services as cheap. Either they will be still more expensive than us or you will be more than likely to not receive half as fine a plan as you will obtain using a more reputed business planning consultancy.
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