Q: Why Pay For Custom Business Plan Fees?
A: When an entrepreneur, solopreneur, or small business (< $15-20 million annual revenues) seeks a business plan, it is typically needed to raise money from equity investors or to obtain a business bank loan.
Additionally, the process brings up questions and seeks strategic answers that improve the business. A great business plan is critical to the business’s success – as a working plan.
Q: What Does A Typical Business Plan Engagement Entail?
A: Initially, our engagement entails a significant amount of research and interviews with key management in order to collect information, including:
# Management capabilities and unique strengths of the business
# Industry status, strengths, and forecasts
# Competitors, competitive position, and competitive advantages
# Unique Value Proposition (UVP)
# Target Market
# Sales and marketing strategy, structure, and plan
# Goals and Exit Strategy – write the plan and run the company to achieve the planned exit
# Financial Forecasts, with Projected Income Statement and detailed assumptions
# More, as needed. Each business and each plan is unique
Q: Is It Really Worth It To Pay Custom Business Plan Fees?
A: We deliver documents that answer the questions typically asked by an institutional investor or major bank. They focus on how clearly management can envision, articulate, and plan the success of the business. They zero in on how well the financial projections are tied to the business plan – and convinces them that their financial risk or investment will deliver an attractive return.
We have scores of experience as entrepreneurs building businesses, obtaining Angel investors, Venture Capital investors, as well as major bank loans and lines of credit.
With Accounting and banking experience, we’re uniquely qualified to understand the concerns and needs from both sides of the table. Our plans and projections get funded.
Q: How Do You Determine Your Business Plan Fees?
A: We always consider a number of things when pricing business plan fees for each engagement:
# The scope of the project
# The quality and quantity of your existing materials
# The desire or time you have available to assist in the research and preparation of the plan
# Clarity of your vision for your business model
# The complexity of your industry and business model
# The availability of industry information
# Your desired delivery date – is it a rush?
Q: What Are Typical Business Plan Fees and Deliverables?
A: We deliver professional documents of the highest caliber:
# Investor-grade Business Plan
# Projected Financial Statements, with assumptions and descriptions
# Investor Presentation – “10-20-30” PowerPoint model – Pitch Deck
Considering these factors, fees for our engagement and delivery can range from under $10,000 to well over $25,000. Each engagement is individually determined.
Q: Are Your Business Plan Fees Reasonable And Affordable?
A: We are well aware that the internet promotes many business plan templates and writers who offer their templated services for well under $5,000. For business managers who want deliverables that get results – money in their bank account – we believe that the business plan is no place to cut corners:
We deliver custom, detailed, professional results that give the correct impression that you are serious about your business and that you understand the needs of your money source. The last thing you want to do is to present a templated plan. Funders know the difference instantly.
Your time is valuable. Let’s consider a typical engagement of $20,000 – consisting of an Investor-quality plan, detailed financial projections, and an investor presentation. In our experience, it would take most entrepreneurs a minimum of 400 hours (10 weeks) to create these, and they may not be comparable.
If you choose to do it yourself, you are implicitly valuing your time at $50 an hour. Surely, you can create more value for your business by focusing on the quality of your product or service, customer satisfaction, increasing sales, and improving distribution channels.
Professionalism adds value. We usually complete a simple engagement in about 150 hours. You’re probably paying your accountant/CPA at least $175 per hour, and your attorney at least $350 per hour. Yet these are essential commodities.
We believe that our experience and specialized skills deliver enhanced value and are a great value, compared to the many other professional services you employ.
Q: Would You Take All Or Part Of Your Fees In Equity, Or Defer Payment Until After We Raise Capital?
A: Only under the most extraordinary circumstances. And only if we approach you with that request.
Q: Will You Sign A Non-Disclosure Agreement?
A: Gladly. We prefer to use our Mutual Non-Disclosure Agreement so that both Parties’ trade secrets will be protected.
Q: Under What Circumstances Does It Make Sense To Hire You?
A: Most of our clients seek to raise up to $20 million of venture funding and/or bank financing. Others may be seeking a smaller amount of Angel financing.
Our clients should also have a realistic view about what types of businesses and financial projections are attractive to funders. We are happy to discuss this most important aspect of the fundraising process.
Q: What Business Plan Fees Do You Propose?
A: See specifics below on OPTIONS for Business Plan Fees.
Q: What Are The First Steps?
A: After signing the Mutual Non-Disclosure Agreement, we will discuss the underlying circumstances of your business and the engagement itself, ensuring that we are clear on the intended use of the deliverables. We then sign an Engagement Letter that documents our understanding, details, and timing.
Business Plan Fees – Sample Options
After establishing the Hourly Rate, Management will decide which Option best suits them, and it will be documented in the Engagement Letter signed prior to commencing the project. Please let me know if you have any questions, or wish to discuss this further.
Option 1: Hourly Fee With Ceiling
# Hourly rate – TBD.
# Hours are tracked in a detailed Log, giving dates, hours and actual work performed. The Log is sent to the client every two weeks, or as requested by client at any time.
# Hours are billed until the fees reach a predetermined ceiling. After the ceiling is reached – the detailed Log will continue to be maintained and reported to the client, but billings cease because the ceiling has been met.
Option 2: Hourly Fee With No Ceiling
# Hourly rate – TBD – lower than the rate in Option 1 above.
# Hours are tracked in a detailed Log, giving dates, hours and actual work performed. The Log is sent to the client every two weeks, or as requested by client at any time.
# Hours will continue to be billed until the project is completed, with no ceiling.
Important Notes:
We treat every project, regardless of the option chosen, as if we were the client paying the bill. We are conscientious about finding the most cost-effective means to accomplish the task at each and every opportunity.
For either option, we bill “1/3rd, 1/3rd, 1/3rd”:
# One-third paid at signing of Engagement Letter.
# One-third paid at midway point, determined by Consultant.
# One-third paid at delivery of completed project.
# For purposes of determining this amount for Option 2, $9500 is used for assumption only. The last 1/3rd payment
will make up under-billing or over-billing on the first and second bills.