Writing a Business Plan – I Practice What I Preach

I regularly meet with prospects that have an idea of a business they want to open. Inevitably, they will ask me “what should I do”. My response is always “write a business plan” and then let me or another third party evaluate it.

I am a big proponent of writing a business plans. The business plan creation process allows you to think out all of the aspects of your business, including accounting, finance, sales, marketing, operations, etc. When done properly, business plans force you to document your (and any partners you may have) expectations of the performance of your business and the return you will receive on your investment (ROI).

I don’t write business plans for clients for two reasons. The primary reason is that I believe that clients need to go through the process themselves. I have a template I give them clients to use that will walk them through the process, so they are not blindly creating a plan. The second reason is costs. When done properly, a business plan can take 20 to 100 hours to complete. So it would be cost prohibitive for a client to have me write a business plan for them.

When I evaluate business plans, I look at them through the eyes of a discerning small business CFO (which I spent most of my career as). I ask tough questions during my critique. It is easy to fall in love with your ideas, which is why it is imperative that you have an outsider review and critique your plan. This process will help you uncover weaknesses that you may not perceive in your business plan.

Over the last week, I have been working on the business plan for the small business technology and network services division of CPA for Small Business that will be opening soon. The process is forcing my partner and me to think out and document our expectation for the new business.

By writing a business plan, my partner and I are practicing the advice I give prospects and clients on a regular basis.

Comments

[Kirk Ward]

Scott,

The experience of writing a business plan is something that I will never forget. During my years in practice, I was rarely ever able to get a client to write a business plan, but the ones who did were the ones that became successful and were able to move beyond the point of being Just Over Broke and actually running a business that could continue while they were away ... usually on vacation.

I also created a business plan when I went into my own practice, but over the years as my practice evolved, the original plan became obsolete because of continuous updates and changes.

Business plans are not static, and when used properly, become more of a living document that is more of a guide than a plan.