I had a phone call with a potential client yesterday. He needed an investor presentation but also was interested in a full business plan.
There are different documents that both are called business plan. One is a stack of files (spreadsheets, gantt charts, PowerPoint slides) that contains the company financials/budget, competitive analysis, and development mile stones. In short: real content. It does not have to look pretty.
The second one is a long document created in Microsoft Word in which market research data is copy pasted (IDC says our market is $1bn), the company opportunity is described with lots of buzz words, and so forth.
You need the first one, you can forget about the second type of business plan. They take forever to write, they take forever to iterate, and as a result they are always out of date. No one reads long written text. Brad Feld and others have called them obsolete.
My client admitted that the business plan job was simply a matter of writing up material that was already there. He was willing to invest lots of money and 2.5 months of work with a consulting firm to have the document rubber stamped, paying for the logo on the front page.
I think it is a waste of money, time, and effort. If the only thing the consulting firm does is write down stuff that already exists, investors will look right though it and judge the investment opportunity based on your content, not the way in which it is written. If it is market data you are after, pay for the market data directly, rather than by hiring a consulting firm in the middle.
Instead, spend a fraction of the 2.5 months time on creating a running slideument of PowerPoint slides and Excel sheets that is the first type of business plan that I was talking about. Change pages as new information becomes available. This document is the messy business plan that you can send to an investor who has expressed a serious interest and would like to dive deep in round 2 or 3 of the due diligence.
The real investor presentation is written for an audience that does not know you very well yet (round 0). It draws on information from the business plan slide deck, but not fully. This presentation are the visuals you feel you miss when you start explaining your business to someone new in 10 to 20 minutes and should be designed from scratch.
Are consultants always a waste of money? Not always (watch out I am biased having been one myself). They can be useful when there is a very specific problem to crack. For example: should we enter market A or B? And then, a firm is only useful if it adds new insights that cannot be bought from market research. A clever market forecast model, interviews with industry experts.
Another type of consultant who might be worth paying for is not a big firm with a big name, but a retired senior executive in the industry segment you are working. She can provide a very valuable expert opinion. These type of project are usually very short, but worth the money. You are not paying for analytical ground work, you are paying for the judgement of 30 years of experience delivered to you in 2 weeks.
In short, pay for real work, not rubber stamping.
If you are interested, here is an earlier post about why I do not believe in business plans.