I got this question over the weekend in my regular email, probably from my Planning Startups Stories blog, judging by the email address used.
If one wanted to get help from a professional business plan writer, what would be the range of fees one would expect to see?
I’ve answered this same question a lot of times in the past, but it’s been a while, so I decided it might be a good one to take on again. And it’s something I’ve followed consistently, for a lot of years, since business plan writing was most of what I did in the 1980s and early 1990s.
No Way Around It: Hours Times Hourly Rate
First thing, let’s just examine the obvious. What you get charged is a matter of multiplying a number of hours times an amount per hour. People don’t work for free. Are you hoping to get something for nothing? Or do you want a business plan written for you by somebody who doesn’t know enough to charge a decent hourly rate? No, presumably, so you’re going to get billed some hours times a rate per hour.
Count the Hours
So let’s start by looking at the hours involved. Think about it. How many hours do you want that business plan writer to spend learning from you about your business? To know enough to actually write a business plan, what do you think is required? Maybe 2 hours? 5? !0? 20? It’s your business plan, remember? Your strategy, your business, your management team, and all of that? So seriously, how many hours do you want?
Don’t forget, as you answer that question for yourself, that nobody wants a business plan that is just delivered and forgotten. You want a plan that stays alive and works for you as you work with it to grow your business. So it isn’t just the hours to know what you’re thinking and write it for you; no, it’s also the hours to know how your thinking changes as your plan and business change; and it will.
So how many hours? You decide.
And How Much Per Hour?
Then consider the hourly rate. How much can somebody who knows business and finance and can do a really professional business plan earn per hour. An accountant gets several hundred dollars per hour. An attorney gets several hundred dollars per hour. These days the average starting salary for an MBA is about $90K per year, which works out to about $43 per hour. And that’s somebody fresh out of school.
I don’t know anybody who has the knowledge and experience necessary to do a really professional business plan who is willing to do anything for less than a few hundred per hour.
So let’s call that $250 per hour.
What Do You Get?
So look at it straight in the eye. You can find people who will do business plans for a few hundred dollars. What do you think you’re getting? Do you want to manage a business based on a plan written by somebody who spent 10 hours doing it, at $40 per hour? Is that useful?