Famous last words!

When it comes to writing a business plan, the numbers usually prove to be the most difficult part of the document to create. Most business people and/or entrepreneurs have a hard time focusing on the short term parts of the plan - especially when all they think about is future business success. Plotting the financial road map can seem tedious. These entrepreneurs can describe with great acumen what the business will do, what it will sell, and who it will help, but quantifying that with financial information escapes them.

Hence we get the call that says, “all I need is the numbers!” Unfortunately,

9 out of 10 times, that’s not true. We go over the client’s plan and see that they need much more than they think. The financials of the business plan shouldn’t be the patched together set of tables and charts most clients perceive them to be. Rather, they should be tied directly into GOOD market analysis and a solid marketing plan. The business plan in this sense is a 3 legged stool - no leg can stand without the other - and so research, marketing, and financial planning all have to inform each other.

If you have the projections, but they aren’t built off marketing to a solid, identified market, what good are they? How many customers are there? How much do they spend on your solution? Are they a growing mass or a shrinking minority? Where do they live in relation to your distribution point (it doesn’t matter if it’s a smoothie stand or logistical supply center) and how many competitors are there between you and them? These are all questions that need to be answered in order for you to effectively reach your market.

Marketing changes very rapidly. The fact you are reading this blog means you are being marketed to in a completely different way than you would have been just seven years ago. Does your marketing plan take this into account? What’s the best way to reach your buyer and then sell them your goods? If location drives your marketing plan, how many people cross your street, and what signage will drive them in?

So when you are working on your business plan and you finally reach the last section and declare, “All I need is the numbers!?” - think twice. After the research has been done for the marketing budget, your sales and expenses should fall right in line.

Chances are that you missed a step. Let us hear from you!

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Recently we have noticed an insurgence of business plan writers into the market place. While we all value the concept of competition, it has become more and more difficult for our prospects to differentiate “them” from us. We take over 50 calls a day from would be clients asking, “How are you different from so and so who is 1/4th the price?”

This seems like a good forum to work this out logically. You want a professional business plan, but people have no idea what the cost is. Lets assume we all (the consultants) are the same in terms of qualified professionals (that’s a big assumption but it will make our point even more compelling.) So, lets say you want at minimum someone who has an MBA working on much of the plan. You also need someone with skill and doing proper financial projections. Your standard business plan should be about 25-30 pages and cover all the usual sections.

Next, lets take what someone who spent upwards of $150,000 on their education should expect to make per hour. MBA, accountant, attorneys all usually command over $100 per hour. But just for the sake of argument, lets make it $40 an hour… about 80k a year.

Now you see a company with the ex-CEO of such and such (was making millions now just wants $249 a plan!!) and many MBAs on staff waiting to complete this plan, and the price comes in at $400 or less and they promise they are doing the whole plan for you! Wow, what a bargain! The SBA says the average entrepreneur spends over 200 hours on a business plan, so it’s reasonable to believe that someone who does the business plan all the time can spend 1/10th of that amount. So we are at 20 hours minimum to do all the financial projections… all the financial analysis, all the writing and editing and demographical research and the hours on the phone with the client going back and forth in revision.

Now lets take that 20 hours and apply our math of a qualified individual is getting $40 an hour. At COST that’s $800. Not including, rent, internet, advertising, taxes, office supplies, computers, printer paper, color ink… on and on. Is it getting clear here? How can they do it?

The answer is simple. They don’t! In the low end business plan model, 90% of the work is actually placed on the client (read, maybe 2 hours is allotted to the business). Massive questionnaires are sent out and the answers are cut and pasted into the plan. The only way it works economically is this… either you never turn the questionnaire back in and the business plan company pockets the $400… or you send it back in and they simply have an editor ($10 an hour) put your answers together. Either way, the end product is suspect. Give us your thoughts.

Our Blog. Finally a method to spread our mantra that clients, current and prospective, can read and enjoy.

No better way to start a discussion on business planning than by carefully discussing all this “blog” stuff, and how we intend to approach it. Have you ever noticed that anything you do well or work hard on can be linked to any other discipline? So shall it be with our blog. This is where the sweat and tears of our everyday labor will become useful advice, insightful case studies, and helpful pointers about how a business plan comes into being - about how it operates in the world, and, ultimately, how it succeeds. A business plan is hard work… and a business blog should be too. We abide by a pledge for this site: No spam, no shameless, self-promoting links, no bootlegged, republished content. The basic business plan follows a defined pattern: it has an executive summary, company overview, description of product/service, market analysis, marketing plan, management team bios, and finally a quality financial model. Our blog, in every possible way, will be true to that structure and symmetry.

This blog will be about every aspect of the business plan - what it is, who creates it and for what purpose, who reads it and why, how to get the plan into an investor’s hands, what the role of the entrepreneur is in the plan, and, lastly… why we do all this. In the end, this blog should be a composite of what we’ve learned from many business plans… perhaps from every one we’ve ever written. It will lay bare many portrayals of the struggles we and our clients endure not only to create The Document, but, in the end, to use it for its divine purpose.

Starting a business is not easy. The business plan is not easy. Anything worth having is worth working hard for, and there are no shortcuts. No discounts, no friend-of-friend inside deals, no free lunches, no way around the fact that most of us need resources to get into business for ourselves. That means we come hat-in-hand to the bank, to the private investor, to the friend or family member, to the big VC, and we ask for that which almost all 4 value most… money. More specifically, we ask for OPM… other people’s money. Nothing is more difficult than conveying your dream, your goals and hopes, and your vision on a piece of bleached white paper, in 2-D, and asking someone else to believe with you. Yet we try - and many succeed, but most fail. But all is not lost! We re-work it, learn from the “no’s” and the “maybes” (soft no’s), digest the criticism, and begin refining things anew. Maybe we humble our visions, maybe we change them entirely, but the one thing we DON’T do is quit. Quitting means not only admitting defeat by Them, it means accepting the death of your dream… and we just don’t think that’s right. Not at Masterplans.

Need a business plan to promote your golden idea? For the privilege of not spending upwards of 300 hours on the plan yourself, we charge a modest premium to craft it for you. We can empirically prove you have a much better chance armed with our plan than with your own in almost all cases.

But yes, you can go it alone … so this blog will be for the benefit of clients and do-it-yourselfers alike. We’ll have some fun, we’ll share some laughs (mostly at other people’s expense), and we’ll learn a lot together. Thanks for tuning in.