Updated: Oct 31, 2019
When it comes to compiling a business plan in order to secure funding there are various ways one can go about it. This quick guide will show you four ways in which one can go about compiling a business plan.
1. Preparing it yourself. This entails surfing the web and reading books to learn how to compile a business plan.
2. Prepare it yourself through a business plan software package. Business plan software packages can cost, on average, R1 300. These packages guide you through the process by asking you a series of questions about your business.
3. Hire an inexpensive business plan consultant to write the plan for you. Most of these plans, and I have seen a lot do not include any of your individual information, these are critical if you want to apply for finance.
4. Hire a business plan consultant at a higher premium to write the plan for you. If you are serious about your business, I highly recommend, treat your business serious and invest. You will need a professional, bankable business plan and there are beside us a couple of great consultant out there. I personally would always recommend an expert in business plan writing. the tricky part with business plans is that you require a couple of different skills, you need to be a great writer and good with words, you need to be an accountant and good with numbers and you need to have an idea about businesses, their processes and how to set up a successful business. And the last important aspect is, you need to know what financiers are looking for. To find all these skills in one person is really difficult, this is why we at Funding Connection have a team working hand in hand to make sure you receive a bankable business plan and you can raise finance with it.
There are several pros and cons of each of these methods are as follows. The next few sections details why and why not to go through each of these methods.
Do it yourself without software
Helps identify issues when starting a new venture.
Forces you to learn about aspects of your business that are outside your capabilities, such as finance, sales, marketing or product planning.
Expensive in terms of your time, as it requires at least 300-500 hours of research. This might put you off starting the business altogether.
You are likely to make mistakes, which will be very costly.
If you’re not a good writer, you’ll have to find a good editor, which will cost you.
If you’re unskilled with finance the likelihood of having an error-riddled financial forecast is high and thus will destroy your chances of obtaining funding.
Do it yourself with software
Some software comes with sample business plans.
The rigid structure makes sure that you don’t leave out anything important.
Software packages are not flexible.
Your business plan may look ‘mass produced’.
You are still required to type the business plan yourself, so if you are not a good writer you will need an editor, which costs money.
You can still struggle with the financial forecast
Hire an inexpensive business plan consultant
Relatively inexpensive, as business plans can cost under R 2.500
Most inexpensive companies will use business plan software and online templates, which will make your plan look identical to what’s already in the market.
More often than not, the business plan will require a complete rewrite if you need funding
Many business plan writers in this space have never started a business on their own.
Many business plan writers are either way good with numbers or good with words
Hire an experienced business plan consultant
Vast experience in business plan compilations and are knowledgeable in terms of what investors and funders look for in a business plan.
You save hundreds of hours of your time. This allows you to spend building your business: team, product, intellectual property, customer base, distribution channels, etc.
They will generate value-added ideas and consult what you can do to make your business more profitable in all areas. Sometimes they will spot errors in your initial business idea and point you towards the right trajectory of business success.
Objective insights and feedback will be provided based on your idea.
They perform independent market and competitor research, giving you a detailed understanding of your industry and the current trends that are taking place. This crucial knowledge gives you the opportunity to identify the challenges and what you can do to be ahead of your competitors.
Reliable financial forecasts are provided, which increases your chances of securing funding.
Fairly expensive, although most of them offer different price points regarding the complexity of your venture and the investment amount you are seeking.
If you are preparing an Equity Funding Plan and you have never written a funded plan before, you should give this option serious consideration.
Even if you know how to write a plan, you should be devoting your time to building your business.
The business plan is often the only basis a potential investor has to decide whether or not to invite you to their office for that all-important first meeting. So make sure your business plan and the financial forecast is done professionally and this will increase your changes to raise the required capital dramatically.
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