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Money Spent on a Business Plan

Check out these tips, if you decide to hire a consultant.

In a recent nationwide webcast, a producer asked an interesting question pertaining to business planning and feasibility studies, “Is it money well spent to hire someone to compile a business plan for my business?”

I have often stated in my years of teaching business planning at Virginia Tech and Cornell University and through lender and agribusiness sponsored business planning programs that hiring a consultant solely to do a business plan for your business without the involvement of both owners and managers is often very superficial. In some cases, it is not worth the money.

However, a consultant can be a valuable part of the business and feasibility plan. They can ensure that the individuals from the business follow a process and stay on task. A paid consultant can facilitate discussions amongst owners, managers, and stakeholders on sensitive issues. A competent consultant is often a good listener, observing what is being said and what is not being said in the nonverbal communication, interviews, and discussions.

A consultant often encourages people to critically think about unintended consequences of decisions. They can bring objectivity to emotional decisions about the business, family, and personal life. In many cases, a consultant will bring expertise to a situation such as finance, marketing, business operations, risk management, and human resource knowledge.

A good business plan and feasibility analysis can take 30 to 50 hours of work side-by-side with a consultant or facilitator. An update to an existing business plan or feasibility study will require about one-third of the time, unless major changes are being made to the business such as an expansion or transition to the next generation.

If one does hire a consultant, here are some tips for productivity and making it worth the money:

  • Outline the scope and project timeline.
  • Identify the expected outcomes and the end product.
  • Be prepared to spend time on assignments and mini projects.
  • Identify the roles of other professionals such as an accountant, lender, lawyer, and financial advisor.
  • It is critical to hold some meetings away from the business to help stakeholders focus.
  • Cell phones and business distractions must be on hold to ensure complete attention.
  • Prepare agendas and distribute minutes for each meeting.
  • Start the next meeting with accomplishments from the previous meeting to build momentum.

Remember, business planning and feasibility studies are an investment in both time and money where one has to work side-by-side with trusted advisors and business partners. If you are hiring a consultant, a successful experience requires a team approach for the money to be well spent.

The opinions of Dr. David Kohl are not necessarily those of Farm Progress.

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