I was asked this question on Twitter yesterday and I can’t resist answering it here: “What should I pay a consultant to develop a business plan for my company?”
Start, please, by reading about my worst ever consulting engagement. That’s an old story now, about how one startup team misunderstood the place of the plan and the consultant, but it’s as true now as it ever was.
The moral of that story, which I really hope comes out loud and clear, is:
Never think of a business plan as a use-once document. It’s not a hurdle you get over. To make your company work you’ll need planning, not plan, and it’s best used like a steering wheel to manage your business.
That worst-ever engagement was my first in business plan consulting. I made my living as a business plan consultant, mostly (there’s almost always a mix of engagements when you’re on your own as a consultant) from 1983 through 1994. I learned fairly quickly that the best business plan consulting was done looking over the clients’ shoulder, making suggestions, asking good questions, facilitating, contributing to the clients’ planning process. Not writing a plan.
So my first answer to this question is this: don’t pay a consultant to develop a business plan. Do it yourself. And don’t think of it as a fancy polished document printed at Kinko’s and coil bound to be presented to investors once and then forgotten. Make your business plan short and practical and just big enough to cover for yourself your strategy, review schedule, milestones, tasks and responsibilities, and basic numbers including sales, costs, expenses, and cash flow. The plan is what’s going to happen. Do it organically, keep it on a computer, and expect it to change.
Think of that document as output of the real plan. Its just a snapshot of what the plan was on that particular day. You’ll be changing it regularly for as long as your business still exists. And in many cases it’s not even a document, but rather a pitch presentation – which doesn’t mean you don’t plan, but rather, that you customize the output to match the requirements of the moment.
You want a consultant? Do you have the budget? Get somebody who’s been through the startup process, raised money successfully, knows what works and doesn’t, and is willing to work with you providing that kind of expertise. That’s what’s usually missing. Not just writing a plan.
I have more on this for tomorrow.