I was wrong about a month ago when I thought I had read the worst business plan ever.
Two days later, I read a worse one. The odd thing is, both plans were prepared by supposedly bright people and brought to me by potential investors who wanted me to unearth what they hoped might be good investment opportunities.
In both cases, the business model and business plan were prepared by a principal of the company. One knew his technology, the second, his marketing. Neither constructed a robust business model that made a powerful case for funding.
Structuring and funding their new companies was probably the most significant business event for each, yet they attempted to go it alone and botched the job because of it. As I asked them why they did this, I became agitated.
Why didn’t they engage a professional to do the job or at least to assist them? Somewhere in the pages of these business plans there might have been a good investment opportunity, but very few people will ever learn of it because of the do-it-yourself attempts.
Just because a person is very good at doing certain things doesn’t mean that he or she has the skills or time to do everything very well. When there is an occasional need for specific expertise, and that expertise is not within your company, engage a professional. Would you attempt to draft your own complex legal documents instead of engaging an attorney?
In doing their own business plans, these owners tried and failed to complete a task outside their core expertise, creating additional problems. They may have now burned the opportunity to get their plan before capital sources who have seen and discounted their current efforts, even if they get the plan professionally prepared. At the minimum, they’ve done themselves no good.
If you need business structuring, planning and pro formas, engage a professional. Whether that is a consultant, attorney, accountant or other, get someone whose job is to do this work very well. These are your hired guns who perform a task for a fee. You get the full benefit of the expertise that you need and it doesn’t add to your permanent payroll. You buy knowledge and skills, precisely what you need and what the consultant sells.
If you were to find a buried gasoline storage tank on your property, you’d be foolish to try to fix the problem yourself. Since it would be uneconomical to put an environmental expert on your payroll for this onetime need, you’d engage an environmental consultant.
So when shouldn’t you hire a consultant?
- If you do not plan on genuinely listening and seriously evaluating the consultant’s work, save your money.
- If your company manufactures and sells shoes, but lacks expertise in wholesaling shoes, don’t engage a consultant, fire your sales manager and hire a superior one.
The bottom line is that with so much riding on the success of your business plan, don’t let inexperience or ego endanger what you have worked so hard to develop. Erwin Bruder ([email protected]) is president of The Gordian Organization, which provides business planning and structuring services to startup and growing companies. He can be reached at (216) 292-2271.
