Tuesday, May 10, 2011

Business Plan Software - Use With Caution

Here you are, ready to start your new venture. You know you need a business plan early on in order to talk to investors, potential partners, and entice people to work for you. You disregard the naysayers who tell you a business plan isn't needed (a smart move on your part, these people just want to sell you some other new fangled way to get funding), and it's time to look at your options.

Option 1: Do it all yourself.

Definitely the most affordable option, and as we all know startups are often not in a position to pony up for anything beyond the bare necessaties. Cost savings will be good, but quality will suffer if you don't know what you are doing. If you go this route, try to have someone proof your fine work, hopefully someone with experience. Occasionally, if I'm feeling giving and have some time on my hands, I'll offer to review a business plan for free, and give the entrepreneur some honest feedback for them to incorporate. Feel free to email me your plan for a complimentary review. chrisb@roguecfo.com

Option 2: Hire a professional (i.e. Rogue CFO)

The most expensive option, and it won't mean you are off the hook as far as working on the plan. It is YOUR business after all, and I'm not a mind reader. It will become a collaborate effort, with me doing the bulk of the writing, and asking you questions to elicit the information needed. A professional, such as me, knows what information an investor wants to see, doesn't want to see, and how to emphasis your strengths, and how to put together a professional presentation. More about that later.

Option 3: Business plan software

This is where I give my 2 cents on why I'm not a huge fan of using business plan software.

First off, you have to understand how business plan software works in general. Typically you pick your industry, and then enter a series of information about your company. You are then guided through a Q&A session, essentially populating the common sections of a business plan. Something to the effect of "Who are your competitors?" might be a question. The software then takes your answers, organizes them in a standard business plan, and there you have it. You may even pick a fancy template so the headers look sharp. Not a bad deal for $100 investment it would seem.

The problem is most people call it quits after that. Job well done, you now have a business plan right? If you look at a business plan generated out of a software package it's very evident the approach you took. The presentation couldn't be more canned. It'll read very choppy. It's not like the software takes what you tell it, elaborates on it, picks what is most relevant, asks you to expand on answers, etc. It feels very much like a question & answer document, and essentially tells people "I couldn't be bothered to do a professional business plan, and basically did this because I had to." That's my take when someone gives me one in that form, and I've already written them off.

You also don't get to shine in areas you should. Say your management team is top gun, you'd want to expand on that. Maybe you have some specialized financial information you want to include, but weren't prompted for it. Maybe your marketing plan is so diverse, so expanded that you simply can't capture it by answering a few questions. Business plan software gives equal weighting to all sections, essentially just walking you through the standard format.

My suggestion is if you go the business plan software route, compare the output to a professionally written plan. Use the software output as a starting point, not an end product. As well, your option would be to take the output and then go to a professional to revise as needed. You've laid the groundwork, now it is less expensive to have someone expand and elaborate on your plan, and put it in a usable condition.

I've written, from scratch I may add, a whole lot of business plans. Think of me as the software, but with the ability to take what you say, probe deeper, explain what typically should be included or excluded, reorganize the sections, focus on the important parts, and polish up a plan that is investor worthy. I'm the software that has sat with angel investors and venture capitalists, done presentations, spent time in the board room, and gotten companies funded.

As always, feel free to contact me, Chris Benjamin Rogue CFO with any questions at the below link.

Chris Benjamin, Rogue CFO

1 comment:

Anne Broone said...

Is thius good?? I hope you will have a more post because i am interested with your blog.. And i am ready to start my new venture. Thank you so much for sharing this one.
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