Do you need accountants to help write business plans?
Is it necessary to use an accountant to write your business plan, whether you are starting, growing or turning around your business? Why do you need one?
Jef Lippiatt Owner at Startup Chucktown
Definitely a great question. I would say it depends on the entrepreneur. Typically the entrepreneur starting the business should be writing the bulk of the Business Plan (including the executive summary). However the part of the business plan that a typical entrepreneur may need accounting help with are the financial projections. I've seen many pitch decks with absolutely no realistic backing to their financial projections. Granted the further out into the future you go (3, 5, or 10 years) the harder it will be to accurately predict the numbers. However if you are trying to get a business loan from a bank or pitch to potential investors you may want to include an accountant if your own math skils are up to the challenge.
I would say if you are self-funding your business, the only reason you would have financial projections would be for your own benefit (or to keep you motivated). However, if you feel like including accountant go ahead and reach out to one.
If your accountant has run a similar business to yours, or mentored good success to other similar busineses to yours they could be a good avenue to help you write your business plan. Otherwise it isn't their main area of expertise.
With a little course of cost, everyone can write a business plan
And your last question is a good one - why do you need one?
It all depends how much you know about your business. Writing a plan can certainly concentrate the mind and make sure you've covered all the basis. However, I'd head out and see how many people will buy the product first. If you're in the latter categories, work out who the business plan is for and write it for them!
A good friend of mine once said that "accounting begins where finance ends." Accountants help a business keep score, not kick the goals for them. They are effectively a referee, making sure you are playing by the rules. So an accountant's advice may be prudent, but I wouldn't go about hiring one exclusively to help write a business plan.
An accountant can help with their expertise, as can a lawyer. You can write a business plan on your own but make sure to include a section where you'll obtain legal and accounting assistance to set up your business properly and also obtain ongoing legal and accounting advice throughout the lifetime of your business. Without at least initial accounting and legal advice, you run the risk of not having your business and personal assets structured properly and end up without a business at all!
An accountant is one option to write a business plan. However, many accountants just focus on the financial data to produce a business plan around cash flow projections, profit, etc.
This document is fine if you need it for a loan or are looking for investors or a business partner. However, a comprehensive business plan is much more.
A comprehensive business plan will include financial data, however it will also include details such as:
- A marketing plan
- A contingency plan
- The purpose of your business (why you do what you do)
- Your short, medium and long term goals
- A growth management plan
An effective business plan is something that you don't just have written for you. It requires your input. It is a living document which you will find yourself referring back to, refining, tweaking and updating as your business evolves. It is your reference guide for your business and your core accountability document.
Don't keep it all up in your head as we only remember about 25% of our thoughts and when we don't act on them, those thoughts evolve with different external stimulae.
Finally, it is possible to write your own business plan without help if you are motivated to do it, otherwise find a professional who aligns with your values to assist you in writing one.