The Start-up Business
MBA and Dan Otto
Good ideas need
good business plans to raise money, but also to determine the
feasibility of the concept. If entrepreneurs don’t have the time or the
knowledge to develop a business plan that will fund a multi-million
dollar idea, they turn to professional business plan writers to craft a
Sometimes the entrepreneur has no
information at all…just a good idea. They ask the plan writers to
research, analyze and develop the entire plan. In other cases, the
entrepreneur has done a substantial amount of research. They give the
writers boxes of papers, articles and other materials, which the
entrepreneur has accumulated over the course of a few months.
The cost of writing a business plan
ranges from $5,000 to $30,000. Much of this fee is based on the amount
of research that is required and the material that is already available
from the entrepreneur. The file box with a dozen reams of paper that are
unorganized, is a major undertaking for business plan writers to read
and properly file. The entrepreneur could save a considerable amount of
money if the papers in the box were categorized and filed prior to
giving it to business plan writers.
segments of the business plan will help the entrepreneur file the
research and other materials. Each of the sections should have its own
file and color-coded label. Subsections should also have color-coded
labels as well.
A business plan can
be divided into six major sections. These are: market analysis,
products and/or services, marketing strategy, company and management,
operations, and finance. Each of these sections is assigned a
For example, the
market section may have a red tab. Before too long the market file may
be crammed with papers. The market section should be segmented further
with red tabs. These are market-demographics, market-growth,
market-competitors, market-drivers market-size, etc. These should all be
coded with red tabs. When the writers are developing the market
section, they go to the red tabbed market folders for all the material
and research that has been provided by the entrepreneur.
The products and/or
services section is represented by a black label. The subsections
include products-description, products-advantages, products-development,
products-buyer demographics, products-future, etc.
strategy section is a purple tab. Subsections include
marketing-objectives, marketing-sales, marketing-distribution,
The company and
management section is assigned another color – yellow, for example.
Subsections with yellow tabs include company-structure,
company-management team, company-facilities, etc.
designated with blue tabs. Every subsection written on blue tabs include
areas such as operations - web site builders, operations-staffing,
operations-payroll, operations-tech support, and operations-order
fulfillment web site services, etc.
The finance section
is assigned a green tab. Subsections include finance-projections,
finance-capital, finance-pro formas, finance-assumptions,
finance-venture capitalists, finance-revenue stream, finance-machinery,
finance-equipment, finance- facilities, and finance-sources and uses
schedule of funds, etc.
As each piece of
paper is filed in the folder, a designation is written in the upper
right hand corner signifying the file in which it is located. For
example, the entrepreneur researches, using the Internet, and finds that
the market size of business-to-business (B2B) in the chemical industry
is a certain amount. In the upper right hand corner of the printed
material, the entrepreneur writes “Market-Size,” and files the papers in
the appropriate folder. Using a yellow marker, the entrepreneur
highlights various sections of the document that apply to the specific
area of research.
contain overall information and can be photocopied and placed into
several folders about specific areas. Each document file should contain
the source of where the information was found. For example, the
entrepreneur finds an excellent Internet site that details appropriate
competitor information. That site address should be included on the
document before it is filed. Then when the plan writers want to
research additional information, they know exactly which web site to
organize their research and file their material in an efficient and
logical matter, they will find that the business plan may cost
considerably less, than if they hand the writers a file box filled with
problem with business plans, especially dot.coms, is that entrepreneurs
don’t think through the entire business process prior to hiring business
plan writers. Although a business plan is work-in-progress, dot.com
entrepreneurs in particular, may not methodically examine all areas of
the business. Oftentimes, the writers will ask questions about issues
for which the entrepreneur has no answers and yet expects the writers to
supply the answer to basic business processes.
In a recent survey
conducted by Centurion Consulting Group, venture capitalists were asked
what was the major flaw in business plans that prevented funding. Over
60 percent of the respondents said the management team was one of the
major stumbling blocks for venture funding. While management team
members may want to read a business plan prior to committing to the
project, entrepreneurs fail to carefully map the organization chart and
staffing requirements for the new business.
Many times, it’s the
details that entrepreneurs overlook. By not having carefully thought
out the fine points of the business process, the entrepreneur runs the
risk of making changes to the plan and thereby increasing the cost, not
to mention decreasing the probability of obtaining funding.