How much should entrepreneurs pay for a Business Plan?

Let me start the discussion today by sharing with you some pricing snippets that I have collected based upon my research.

A UK based company pricing for a Tier 1 (Entrepreneur) Business plan is given below.

The pricing provided by a German based company  is given below. 

Based upon an answer that I saw in Quora, I found some more data which is shared below. I think with these 5 data points we can get down to our analysis for what should be a good benchmark for a business plan.

As you see that the cost quoted by the German company varies widely with the cost we see in a company like Master Plan or Growthink.

Based upon the different price points, I have created this matrix, that should help entrepreneurs to decide on the optimum price that they should pay for Business Plan writing services.

Now let us map these 2 aspects and see how much a Firm 1, Firm 2 and Firm 3 should ideally be paying for a professional business plan.

Based upon the cost structure provided by different companies, we can arrive at some rough estimate of what a business plan should cost for different companies in different stages of their lifecycle, location, funding status, revenue generation etc.

      1. Any basic business plan can take anything between 40-80 hours. Considering an average pricing of $25 per hour rate the cost of a basic business plan can range between $1000 -$ 2000. Anything below that, consultants will not be able to do justice as the effort and cost will not be in sync and in a rush to complete the job, the final output will not be to the quality level expected.

When you are running a company which has been in business between 5-10 years, revenue generating and located possibly in US or Europe, you can be expected to pay in the range of US$ 2000 to US$ 4000. It has to be taken into consideration, that multiple factors can affect this price band. The time required to complete an advanced plan will be anywhere between 80 hours to 160 hours. The minimum consulting cost will be $ 25 if you are able to negotiate and can go to anywhere between $ 100 - $125.

 The complexity of the business is another key consideration that can affect the price. A sme business plan will be a little less complex than if you are into helicopter repairing and a B2C E-commerce business plan will be a little more complex that an enterprise solution provider. Another very important point is that whether you want to drive a Lamborgini or a Ford i.e the level of customization and finesse that you want in the plan. I think there is very little to explain here except for the fact that the former is a highly customized vehicle which uses very high end parts to run the vehicle. In the second case, the quality may be good but it is still a mass produced vehicle with good quality parts. 

An advanced + business plan involves a high degree of complexity. It fits well into large companies that have been in business for multiple years. They have large cash flows, greater expenses, stocks in hand that needs to be carried to the next years account, depreciation etc. These are few parameters that make these plans complex and require a high degree of expertise to complete these plans. If it’s a services business or a high tech industry, there again we need to understand the product very well so that the plan can be structured correctly. So, if someone is designing a special chair for a person with disability or an ai application to detect night intrusions, both require a deep understanding to create a professional plan. In that case the price is greater because of the expertise required to complete the plan. These plans can start from $ 4000 and go upto $25000. 

There are some other factors that goes into a pricing of a business plan. Pricing also depends on the company that you are working with. A large company with multi location presence will definitely charge higher because of their brand equity. On the other hand a niche consulting firm may be able to charge a little less because their costs are limited.

Another factor is the location where the business and the consultant is located. It is fairly common knowledge that charges in US or Europe will be higher that what is charged in a location in Asia. This can result in cost escalation because an American company may not be able to compete in terms of price with their Asian counterparts.

Therefore, when asking for professional business plan writing services, the client should consider all these aspects and outline the requirements clearly to the consultant that will help both of them to arrive at a cost that is feasible to either of them.