Whether you're starting a new business or seeking ways to expand an existing one, proper planning is paramount. Unfortunately, your passion and enthusiasm are not enough to build a successful company. You also need to conduct market research, make financial forecasts, develop a marketing strategy and validate your ideas. A business plan consultant can help you with these tasks and recommend the best course of action based on your goals.
TL;DR (Too Long; Didn't Read)
An experienced consultant can draft, update and improve your business plan and assist you at every step of your entrepreneurial journey. The key is to choose one who understands the intricacies of your industry and specific market.
Why Business Planning Is Important
Many entrepreneurs get carried away by their passion and ignore the core aspects of running a business. About 42% of startups fail because customers don't want or need what they have to offer. Nearly one-third of small business owners go out of business because they run out of cash. Legal challenges, lack of financing and poor marketing can all lead to startup failure.
A business plan doesn't guarantee success, but it can mitigate these risks. Additionally, it can make it easier to achieve your goals, whether it's growing the company, getting investments or increasing productivity in the workplace. Companies that have a professional business plan grow about 30% quicker and are more likely to become successful than those without one. They also experience improved performance, according to a study conducted on over 11,000 organizations.
Think of this document as a road map — you can travel without one, but you may get lost along the way. Business consulting will keep you accountable and will provide the information you need to set smarter objectives and benchmarks. Plus, it may help you secure funding by showing investors that you have a solid business idea with income potential and a strategy to implement it. This strategic tool connects the dots in your business and articulates your vision.
If you're ready to start a new venture, business planning can help you understand whether or not it's worth pursuing your idea. It also comes in handy when you need to purchase new equipment, grow your team or set specific objectives for managers. Furthermore, lenders may want to see your business plan before giving you a loan. That's why this document should cover your short- and long-term goals as well as your strategy for growth, a detailed market and competitive analysis, financial forecasts and other key aspects.
Elements of a Business Plan
No two business plans are the same. This document can have a single page or a dozen pages as long as you cover the essentials. At the very least, you should include the following sections:
- Executive summary: An overall outline of your business plan that should briefly describe your mission, products, competitive advantage, financial requirements and notable achievements of the company (if any)
- Company description: More detailed information about your business concept, objectives, target market and products
- Market analysis: Describe the key features of the industry and market you're planning to enter
- Competitive analysis: A compelling description of your main competitors and their strengths and weaknesses as well as their target market, advertising strategy, accomplishments and other characteristics
- Products and services: Describe your offerings and product features, what makes them stand out and how they compare to those available on the market; consider mentioning your suppliers and distributors too
- Management and organization: Create detailed profiles of your team members and their professional background; state whether your business will operate as a sole proprietorship, a limited liability company, a partnership or a corporation and who will be responsible for what
- Marketing and sales strategy: Describe your marketing and sales plan, distribution channels, advertising budget, sales targets and other relevant aspects
- Financial projections: Estimate your potential revenue and financial goals for the first year in business (or a longer period depending on whether you're a startup or an established company)
- Capital requirements: Estimate your startup and ongoing expenses and describe how you plan to use the funds you're trying to raise
Use the above sections as a starting point to write your business plan. Remember that this document isn't static; be prepared to update it as your business grows or your objectives change. You may also need to expand certain sections depending on what you're trying to achieve. For example, if you're seeking financing, you must emphasize the key financial points and market potential of your products or services.
Another aspect to consider is whether you want to use a traditional business plan or a lean-startup plan. Traditional business plans use the structure described above and require more work. Lean-startup plans are no longer than one page and can be used to validate a product or business idea. Either way, it's worth hiring a business plan consultant, especially if you're trying to attract financing.
What Is a Business Consultant?
Even if you're familiar with the concept of a business plan, you may still benefit from expert help. Companies of all sizes rely on business consultants to assist them with their marketing, management or legal needs. These professionals use their skills and expertise to analyze a company's practices and make recommendations for improvements. Depending on their areas of specialty, they can draft business plans, evaluate competitors, review financial statements and more.
Ideally, look for a business plan consultant who understands the intricacies of your specific industry. This way, he will be better able to analyze the market trends, industry key players, economic conditions and other factors that may affect your business. A consultant can review your business plan with a fresh pair of eyes or create one from scratch. He may identify and fix problem areas and recommend necessary countermeasures.
The truth is that business consultants rarely use the word "problem." Instead, they help companies reach their full potential and find solutions that benefit their bottom line. These experts can do a lot more than just design or improve your business plan. They may also collect information about your competitors and target market, conduct surveys, analyze and interpret data, create reports and provide guidance for any issues you may encounter.
When to Hire a Consultant
Knowing when to hire a business consultant can be tricky, especially if you're short on money. However, even if you don't have the spare cash on hand, it may be worth saving up for this kind of help to get your business up and running. As an entrepreneur, you may or may not have the skills needed to write a solid business plan, or perhaps you're not too good at planning in the first place.
Having an amazing business concept is not enough to succeed. You also need a plan to implement and execute your idea. A consultant has the know-how to create a business plan that aligns with your goals and appeals to investors. She can also help you implement the steps outlined in your business plan and avoid costly mistakes. Consider hiring one if:
- You're ready to start a business and need help with planning.
- You want to test your business idea before investing more time and money.
- You are planning to apply for a small-business loan or reach out to investors.
- You're planning to enter new markets or expand your services.
- You don't have the skill set or internal resources to tackle a new project or implement a new strategy.
- You feel it's time for a new perspective.
- You're trying to reduce business expenses.
- You want to implement new equipment or technologies in your organization.
- You're struggling with common startup problems, such as few or no clients, high overhead costs or lack of capital.
Don't wait too long before calling in outside help. If your budget allows for it, reach out to a business consultant right from the start. Better yet, do it before starting your business so that she can help you plan things and pinpoint potential issues. Work with a consultant at each stage of your journey to get an expert outside opinion on your strategy and business practices.
A business plan is a living, breathing document, meaning that it has to be continually updated. For example, if you decide to enter new global markets or open new locations, your business strategy will change. A consultant can review and update your business plan to ensure it reflects these changes and covers every detail involved in the process.
Choosing a Business Plan Consultant
Hiring the right business consultant can be a challenge. Ideally, you want to choose one who has a deep understanding of your specific market and industry practices. He should have experience with business planning and startups in general. You can always hire a business plan writer, but he may not know the intricacies of your industry.
A good consultant should be familiar with the kind of problems your business is facing and possess skills that complement those of your team. Look for a professional with strong work ethics and entrepreneurship skills. After all, why would you trust someone to advise you on starting and managing your business if he has no experience in running his own business? The right person should have real-world experience with startups and small businesses.
Be clear about your expectations and the length of your engagement. Some business consultants prefer small, part-time assignments, while others prefer large-scale projects to assist you at every step of your journey. Make a list of the skills and qualifications for which you're looking and use it to filter out candidates.
How to Find a Consultant
Start with your professional network. If you have friends or colleagues who run their own business, they may know someone who can help you with your needs.
Another option is to use online networks, such as Catalant, which features more than 65,000 independent consultants in every niche you could imagine, from strategic planning and management consulting to financial analysis. Some websites, like Coleman and CLG, match users with business consultants and other experts, so it's worth checking them out.
Most startups don't have the resources to hire big consulting firms like BCG or McKinsey. Plus, these companies focus on enterprise solutions, so their overall approach and fee structures don't fit the needs of small businesses. Instead, reach out to boutique firms or independent consultants. Boutique firms are often more flexible and open to innovation than traditional consulting agencies.
Interview Potential Candidates
The next step is to interview potential candidates. Choose a business plan consultant who answers your questions clearly and listens to what you have to say. Avoid those who are just trying to sell their services. A true professional will challenge your assumptions, provide real-world examples and plan for business scalability.
Look for a consultant who is honest about what she can and cannot do for your small business. Consider asking the following questions when interviewing candidates:
- Why do we need you? What would you bring to this role?
- Do you have experience with business planning? Can you provide any examples of your work in this area?
- Have you worked with other companies in this industry/niche? Are there any insights you would like to share?
- What do you know about this company?
- What is your professional background?
- What is your approach to business planning? Can you describe your strategy?
- Can you describe how you've successfully tackled small-business challenges that were outside your expertise?
- How do you measure the success of the strategies and initiatives outlined in the business plan?
- What happens if we terminate the contract? Do you feel comfortable signing a nondisclosure agreement?
As a startup founder, you want to hire a skilled business strategist, not just a business plan writer. Therefore, it's important to choose a professional who will not only draft your business plan but also make sure it's successfully implemented. She should also be able to track the results and identify potential issues before they escalate.
- CBInsights: The Top 20 Reasons Startups Fail
- Bplans: Do You Need a Business Plan? Scientific Research Says Yes
- Entrepreneur: Elements of a Business Plan
- U.S. Small Business Administration: 5 Reasons You Need a Business Plan
- Investopedia: Lean Startup
- National Center for the Middle Market: Types of Business Consultants - What They Do and Why You Might Need One
- Business News Daily: What Is a Business Consultant?
- Entrepreneur: When to Hire a Consultant