How Business Plan Consultants Price Their Services
- 3. December 2016
- BrainHive Know-How Base @en
Analyzing the search behavior using certain Google tools, one immediately sees that the demand for cheap or free business plans is high, service providers offering a low business plan writing service price are in demand. Many beginning founders find themselves surprised by the hurdle of the business plan and they are looking for a simple fix which will not break the bank (if this is you, have a look at our handy business plan price overview and see what requirements you are looking for).
In this article we will analyze what exactly are the different tasks of the business plan consultant and why it is under normal circumstances very difficult to come up with a professional business plan set (written part + financial part) at a price which is lower than US$600. For our sample pricing scenario we are assuming a business plan for a small restaurant which is to be funded with about US$100,000, which would require roughly 15 net pages at 300 words/page for the written portion of the business plan and ~8 pages for the financial plan.
Education of the Chief Business Plan Writer, Marketing, Administration and Communication
To successfully run a business plan consultancy you first of all need a whole lot of education, and I am not only talking about not just formal academic education, but also practical experience in a very special fields of business administration, which is business development strategy / business model engineering. In the United States, you would have to pay above US$120,000 to come by such an education.
The opportunity cost for the business plan consultant is likewise relatively high, because someone who qualifies for a senior business development analyst will usually also qualify to work in certain corporate positions making between US$140,000 and US$250,000 per year. Usually therefore a senior business plan consultant chooses to establish a business planning consultancy because he enjoys that specific line of service and helping startups and fledgling founders, not because of the money.
Building up a business plan writing service comes with a lot of expenses, especially marketing. At BrainHive for example, we spend about US$3,000 every month just on marketing. Other business costs amount to about US$2,000, that’s for example rent, insurances, IT and telecommunication fees and office supplies as well as transportation costs and a whole basket of other miscellaneous expenses. Personnel expenses are a whole different story altogether, but also come with a hefty price tag.
We also spend a lot of working hours on administration and communication, both for prospecting as well as project management. These expenses must also be factored in.
Producing the Business Plan: A Time-Consuming Effort at Every Level
Professional business plan creation comes at a considerable time investment at different stages of the business plan writing process. First of all we need to go through the business concept questionnaires that our clients fill out and give to us. Usually the information will have gaps or there are paradox statements that need to be clarified. Just this stage alone can take up 2-3 hours depending on the complexity of the business concept. For our sample restaurant business plan, let’s be optimistic and say it’s one hour.
We then go about writing all the portions of the business plan that do not require external market analysis, and that’s about three hours for a trained business plan writer, using tools such as speech recognition and access to our business plan library. I would assume that for an untrained person using no tools the figure would be about four times higher.
For our sample business plan I think it is accurate that about 1.5 hours will go into research to come up with all the information for the market analysis, competition analysis, location analysis etc.; Developing the respective components of the business plan on the basis of the research material will take about another two hours.
Our business plan financials analyst needs about an hour to compile a three-year forecast financial plan for the respective sample business plan, using our elaborate Excel financial planning template (which, if you would have to come up with it by yourself would take a trained professional about a day to build). Financial plan in hand, the business plan writer will finish his draft and give it a final look over, which should take him not much longer than 45 minutes.
The business plan draft set will then be passed to our quality assurance team for inspection. The quality check for the sample business plan we talked about would be between 1-1.5 hours. Since at BrainHive we include correction loops in our business plan writing service packages, we calculate an additional budget for these follow-up works between half an hour and one hour for corrections.
So let’s recap for our short & simple business plan example:
- 1h for prospecting, project management and administration
- 1h for information gathering and feedback
- 3h for writing non-research components
- 1,5h for research
- 2h for writing non-research components
- 1h for financial planning
- 0,75h for writer’s finalizations
- 1h for quality assurance
- 0,75h for correction loops
That’s 12 hours, and that’s the minimum time for a simple business plan. Now imagine if we are writing a 35-pages written portion business plan with a 72-months 5-year projection for a highly complicated tech startup with specific needs to be met at a high detail level of both the analytical portion and the financial planning. The time, effort and level of professionalism required are immense.
Business Plan Writing Service Pricing and Profit Margin Calculation
For a simple business plan described in our example we charge around US$970, roughly one third of which we keep as profit, about 60-70% goes to pay staff involved in the project management and business plan creation process. When conducting business planning projects, our analysts therefore make between US$30-$80 an hour, depending on their skill level and specialty. A fair number of freelance consultants with similar skill level working in areas of business development or strategy for larger corporations charge anywhere between US$800 and US$1,500 a day, that means they are making about US$100-$200 hour. Again, you are seeing that also our analysts are not in it for the money, but rather appreciate the relative freedom and entertainment factor of this line of consulting work.
The way that BrainHive works is that we have our specialized analysts and we are functioning not as a sole freelancer consultant group but as a business. Keeping in mind our fixed costs that I talked about earlier and the need to grow to secure our market share and also to fund important side projects of BrainHive such as our business plan charity program, you can perhaps understand why the cost of having the business plan written for you may appear high to you, but, at least as far as our prices go, is actually extremely affordable and most probably we will find ourselves having to raise prices as we become more established as hopefully THE go-to business planning consultancy in the English, German and perhaps even Spanish-speaking part of the world.
Conclusion: Love Your Affordable Business Plan Writing Service
When you look at BrainHive in the future or asking our sales staff for discounts, rate payments or charity rebates, it helps to remember none of us are in it for the money. I founded BrainHive because I really like helping startups and founders and I enjoy being able to work as a business plan senior consultant from any part of the world. It’s exciting, two projects are never the same and I feel we are creating true impact in people’s lives by taking down the business plan hurdle both for funding and bureaucratic purposes.
Even as new competitors, artificial intelligence to replace blue collar work and software-based business planning solutions are flooding the market we are not particularly worried about our line of consulting going out of demand, because it’s really an art to write a winning business plan. Thinking about the business plan writing cost as a worthwhile investment into your startup’s future is the right way of looking at this particular expense. Going with BrainHive, you can rest assured that we go above and beyond to lay out a business planning architecture that will reveal valuable ideas to you that you have not even thought of.
Go with the cheapest or try writing your business plan yourself, chances are you will in the end not have a fully useable business plan or that your effort will have been way more than if you had chosen a business plan writing service at a normal price. Just saying- of course the choice is up to you.
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Joachim Jacob Görbert, Director
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