Writing a Business Plan

by Helen
(USA)

Writing a business plan is totally new to me: how much information do I need to provide or use to develop an effective business plan?

I've hired someone to help me in writing my business plan. The forms they gave me to fill out are so extensive regarding assets; liabilities; daily expenditures; future forecasting; asking dollar amounts for every expense category past, present, future; sales forecasts and projections - does this sound normal?

I am reluctant to provide so much detail; am I being too cautious? Is this what is needed for writing a business plan? I'd appreciate your feedback. Thanks.

A Similar Request - December 31, 2011
I'm working on my business plan with my staff and we're going to send it to a professional for review. Do we need to have the professional sign a confidentiality agreement or should we trust that the information we prepare and provide will be safe and secure? Also in doing a business plan how much historical information is necessary to plan for the future and how far out (in years) should the plan project?

Response from Kris at More-for-Small-Business
Even though you are working with a professional (who by that very title should understand, accept and protect that the data you provide is confidential), I always, and recommend others, use a confidentiality agreement. That way there is no misunderstanding your expectations.

To look for historical patterns - specifically with your key performance indicators (such as sales, profit, productivity rates, employee turn-over, safety, etc.) I like to have 5 years history unless there has been a significant change (up or down) which could distort the planning process. Typically, 3 years historical data is used when producing a longer term (3 to 5 years) business plan.

Business plans are dynamic and need to be updated annually (and tracked monthly and quarterly). The plans that I work on usually are prepared for the next 3 to 5 years (following the vision statement for the business); and reviewed and updated annually.

Writing a business plan requires ongoing effort. If you work with outside resources like a consultant you need to be confident in the relationship because you will be providing them with a lot of access to your information.