Please Don’t Show Me Another Canned Business Plan.
I can’t tell you how many people come to my office looking for some help to get their venture off the ground and the first thing they hand me is a thick stack of paper complete with color charts and graphs with all the corporate “lingo” to boot. They then tell me this monstrosity is their business plan. I always take them seriously since it’s my job and I hope that one day someone will hand me a business plan that actually took time and effort to write. Instead what I usually see instead is the result of the time and effort they put into learning how to use a $99 software package like Palo Alto’s Business Plan Pro, which advertises that it “produces a plan which you can hand to bankers” and “[i]t couldn’t be easier. Just answer a series of straightforward questions, and the software determines the next steps based on your specific answers.” In all my years of practicing law I have never been able to hand one of these canned business plans to a banker without getting a “here we go again” look and the business plan ends up having to be either rewritten in under 10 pages or else the financing is denied.
Now I don’t begrudge these software makers for making a product that fills a need. What I am telling you is that bankers and any other investors worth their salt can spot these so-called business plans a mile away and these canned plans materially decrease your credibility in their eyes. And who can blame them? If you were about to land or invest money into an enterprise run and/or founded by someone who wouldn’t even take the time or the effort to create their own work, what would you think? I’ll tell you what they think; they think you’re a joker. A business plan is meant to focus its writers on their vision of how the venture will work, benchmark its goals and explain the need their business will fill now and in the future.
A business plan is not something that “couldn’t be easier. Just answer a series of straightforward questions, and the software determines the next steps based on your specific answers.” Good business plans are hard to write, require much thought and considerable effort. Moreover, if you think a banker or an investor wants to read 40 pages of the same crap they’ve been handed over and over by lazy entrepreneurs, think again. Most lenders and investors want your business plan to be no more than 10 and at the most 15 pages after that they just lose interest. The surest way to get your loan, SBA financing, or investment capital denied is to walk into their office and hand them one of these canned documents.
So please, I’m begging you: stop using that software and sit down and write and I mean actually write your business plan. Writing will force you to think about your business, give you credibility, and save everyone a lot of time and effort by not having to redo it.
April 27th, 2010 at 2:18 pm
I developed the business plan software imitated by the culprits in your article. And, I agree with you 100%. They don’t get it. Biz Plan Builder actually makes the entrepreneur think about their project, do the financial math so it makes sense (to themselves as well as an investor or lender), and deliver a credible non-cookie-cutter business plan. It’s a very different approach. Comparing success cases supports the differences. I regret that the other guys make the idea of using software to support writing a business plan so unworthy. Customers who have switched to JIAN have reported similar experiences of needing to rewrite their plans. I can go on an on… suffice it to say that our users have gone on to many many successful financings and business successes. (There have been a few who realized during the development of their plans that the business was too much for them–good, keep your day job and your life-savings.) Thank you for raising the red flag. It keeps us all honest.
April 27th, 2010 at 3:46 pm
I am glad to hear this from someone who helped start this cottage industry and calls it like it is. It is not too often that an “insider” will bite the proverbial hand that feeds it. It is a sign of true vision seeing where the industry is and where it needs to go. What software is yours? Is it called Biz Plan Builder? I would like to take a look at it to see if I can recommend it to my clients.