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.

When you are paying for advice listen to it! Recently I had a client who was working as a pharmacist for huge retail chain and just could not stand it any more so he wanted to buy a pharmacy. We came across what initially looked like a great deal—the seller had just been through a divorcee, was desperate to sell and was willing to finance the entire purchase price. The seller made numerous representations to that business was operating just fine and that it would be a turn key operation. Despite the rosy picture the Seller was painting after some digging we discovered that the store was almost 6 months behind in its rent, was in default to it main vendor who had initiated litigation and the ex-spouse would need to sign off on the deal since she was still part owner of the company. I don’t know what more could have been wrong with the deal.

Though my guy was anxious to leave his current employer, he did the right thing he listened to his team when we told him he would be crazy to move forward with this transaction. Too many times though a buyer gets a case of the “first time home owners syndrome.” The syndrome often afflicts first time home buyers who are so desperate to close on that first house that they will overlook any problems with the property—only to have buyers’ remorse down the road.

Just like buying a house, often buyers who are unhappy with their present situation and are longing to move on will catch the syndrome and overlook material problems with the deal just to close or leave or whatever. They always regret the day they decided to move forward instead of listening to the people they hired to look out for them. Buying a business is one of the most significant steps than a person can take. The transition from employee to owner is stressful enough without the added headaches of a company rife with problems from day one.

How do you know if you have the “first time home owners’ syndrome”? One test I use is to see if the client can get up and walk away from the table without looking back. If you can’t get up and walk away, then you’ve probably got the syndrome since and will probably do something you will regret down the line. What is the cure? Simple, listen to the people you’ve hired to guide you through the process—they have an objective perspective and can see more clearly than you.