Frequently Asked Questions

  1. Why do I need a business plan?

    A business plan is often the entry-level requirement to getting government money, investor capital or bank loans. Although, you may have a complete picture of the business in your head.

  2. I own a tiny, local company as a sole-proprietor. Do I really need a business plan?

    It depends on the fact if you need to raise any capital or require investors. If no capital is required a business plan may help your profitability and success. By understanding the local market, you can reduce any upcoming risks and profit from new opportunities. For instance, if you operate a small video store in a town of 10,000 residents the plan can help you better understand your market, competitors and the external environment. New technologies and advances can often wipe out entire industries. Just ask the record manufacturers.

  3. With the fast pace of business, how can a business plan be helpful if it is quickly outdated?

    In today's breakneck fast-paced business world, the only answer to outdated business planning is BPM or Business Plan Monitoring. BPM is primarily set-up for internal use. This process begins with identifying the performance metrics for the business. Performance metrics are key ratios and numbers vital to the company's success.

  4. If business plans are so important why do so few people actually write one?

    It is in human nature to put things off and procrastinate. It is a challenge for many business owners to put their assumptions on paper and risk the fact they may be wrong. A study mentioned in "Business Plans For Dummies" by Paul Tiffany states that companies with just the strategic section of a business plan have 50% more profits and revenue than non-planning businesses. Another survey found business planning companies have 63% higher revenue growth and 100% more profit.

  5. What are the sections in the business plan outline and which are most important?

    A business plan outline is the second most important starting point once you've pre-determined your audience. The business plan outline should be prepared before the actual research and writing of the business plan. Once your outline has been set; organize your research files around the layout of your plan.

  6. I don't have a management team in place, what can I put in this section of my business plan.

    The management team is critical to a solid business plan. If you don't yet have the funds to attract the talent you need, you can still find your staff with a future promise to come aboard when funding is complete. In this section, put your team as "acting CEO or acting general manager". You can also assemble a board of directors to add further credibility to your business.

  7. Should I use business planning software?

    Business plan software can help you organize your plan and guide you through the process. The big cautionary note here is that many bankers and investors will know a "canned" business plan which often lack originality and much thought. Think of your potential audience and decide from there.

  8. Should I hire a business plan consultant or writer?

    Business plan consultants can be valuable in aiding you to complete your business plan. It is often best for the business owners to write their own business plan. In many cases, this is not feasible because of time and skill restraints. Use a business plan consultant to help you with business plan research, writing, editing, and feedback. If the business plan consultant is doing most of the work then make sure they regularly consult and communicate with you during the development process of the plan. Spend the necessary time to review & know the final plan inside and out. You must be able to explain the details and assumptions behind the plan to an investor or banker. Finally, existing business owners can benefit from hiring a business plan consultant to save precious time and offer new insight into funding and improve your business.

  9. How many pages is the typical business plan?

    The length of a typical business plan can greatly vary from 10 pages to a 100-page document. It really depends on the intended use of the plan and it's audience. An internal business plan for your company may exclude areas such as management team experience and be heavier on the implementation side. A basic plan for the banks will usually run 20 plus pages including the financials. The executive summary should not exceed 3 pages. A 2-page summary hitting all the key points in the plan is brief enough.

  10. Do the readers of my business plan need to sign a non-disclosure agreement?

    A non-disclosure agreement (NDA) can send up red flags to your intended audience. A seasoned banker or venture capitalist is bound by client confidentiality and may find a NDA insulting. Secondly, if the business needs to protect its ideas and concept at this stage of the game than there may not be any barriers to entry for others to enter the market. A simple confidentiality clause at the front of the plan should suffice. In some cases, such as setting up a strategic alliance a non-disclosure may be necessary. If in doubt, consult with a lawyer.

  11. What are the most common mistakes made when writing a business plan?

    There are many errors made by inexperienced business plan writers or business owners who fail to see why their plan was not accepted.

  12. How do I start my business plan?

    Writing a business plan can be an overwhelming task. These feelings often translate into immobilization or confusion as to how to start the business plan.