Sagacious Think

looking ahead

I’ve long bitten my tongue when I see entrepreneurs outsourcing the writing of their business plan because they are speaking with (insert as appropriate) the VCs, the bank, other investors in two weeks, but no more.  I have some things I must get off my chest.   This document – a business plan – is supposedly the road map for their future livelihood, and they are leaving its development to someone else?  Not only that, but given that this business, which presumably, they intend to have for the foreseeable future, they are only allocating two weeks for the effort.  To me that’s a recipe for disaster.  As Tim Berry sagely points out in his blog, on the same topic, if you are going to have someone else write your business plan, how would you answer the following questions:

• If you wanted to get your body in shape, would you hire somebody else to eat better and exercise regularly?
• How would you feel about sending somebody else to the doctor to be examined to determine your health?
• How do you feel about pre-packaged vacations?
• What would you tell your ghost writer? How long would that take you? Could you type that out, maybe? Could you do it in YouTube?
• How will you deal with questions that come up, after the plan is done?
• How much good will a one-time plan document do?
• What will you do about revisions later on? Will you just accept a plan done once, and never revise?
• How long would you estimate is the average shelf life of a written business plan, before it begs for revisions?
• What would you do about regularly reviewing and revising a business plan that some outside business plan writer had written?
• How would you get a team of people committed to a business plan that an outsider wrote?

He gets his point across nicely.  Most business plan writers I’ve see use a generic approach.  They have to, given the volume they pump out, business plans are their commity.  But I bet if you ask most entrepreneurs if their new business is unique, they’d say yes.  Its got special features, core competencies, challenges that will differentiate this company from the competition, not blend in.  Isn’t that what the investors want to understand?  Is someone from the outside, the outsourced writer going to understand, if you cannot articulate those answers yourself.

Is an outsourced writer going to understand:

• the nuances of cashflow to your industry?
• the industry specific risks involved?
• the type of people you need to bring on board and when?
• what differentations your product/services from the rest and how?
• the opportunities and timing?
• who are the competition, the substitutes, and the compliments?
• who’s the primary customer/client, secondary, and why?
• what’s the marketing plan – how are you going to get customers, grow?

The entire process of developing a business plan cannot, and should not be farmed out.  Asking and answering those difficult questions that are imperative to developing a good business plan, are critical to the success of the business.  Having someone not in the company retain this information is simply not prudent.  Sure some of this will be captured in the document, but the process as to why certain selections were made and why some were discarded is lost!  This step in developing a strong company is critical and short cuts just do not work.  When leadership understands the direction and challenges that a company faces they react more intelligently to adversity and are also better able to capture opportunities.

Bringing in outside expertise can makes sense, they can objectively ask the critical questions first time entrepreneurs face, find the gaps in knowledge that have to be address, offer suggestions for resources but just don’t toss them the keys to the new car.  My recommendation, first write, or attempt to write, as much of the business plan yourself.  Or if you feel you need help from the beginning hire someone to help you explore the issues, but do not hoist it off to them.  Valuable knowledge will be lost, and this is about the only time in this process where you can strategize and change directions on a dime before any resources have been investment.  the process of writing a good business plan really helps put all the pieces of the puzzle together, the pieces that don’t fit stand out and any amount of hammering is not going to make them fit, but then it is easier to identify what needs to be tackled next.  A good consultant should impart knowledge – they will facilitate and coach, so along with a solid plan you come out stronger than before.