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hey this is kyot projection hub and today I'm going to be talking about how to create a business plan for a professional service firm or a consulting firm um that if maybe you're trying to get financing improved for your business to grow it or start it or maybe even raise investment for that or perhaps even just doing internal planning this video will outline um the structure for a business plan that you can use you can use but primarily I'm going to highlight five key points that I think are really going to make or break the business plan especially like if you want to increase your likelihood of getting approved for financing um this is kind of geared towards that that you know goal so you can see here I'm going to be using a free business plan template you can get this down in the description of the video below um it's specifically made for a consulting firm Professional Service now it's pre-filled out with a fictitious example or use case for like an HR Consulting firm or like a talent recruiter firm um but obviously there's a lot of different types of Professional Services you could be a creative Agency for example and so I'm not going to like explain everything specifically just for an HR firm but that is what it's prefilled out with as an example but I'll show you um some tips and tricks and those five key points I mentioned can apply to really any industry some of the tools I'll show you how to use so who is projection hub we've helped more than 50,000 businesses and entrepreneurs create Financial projections for their businesses you know for their loan applications their business plans their pit checks and um many of those businesses hundreds of those businesses have been Professional Services or Consulting type firms and so we have some experience working there and before my time with projection up I actually was a small business lender for about seven years and so worked with a lot of different Professional Service um type businesses to review their business plans and put together uh packages for loan applications so some experience seeing that as well and so if at any point you find this video helpful for you please give it a thumbs up that really helps us here um at projection hub and also consider joining the channel following the channel by subscribing um not all of our content is about Professional Services um but we do release a lot of content just tips and tricks on managing the financial side of your business um and things to look out for on that front um to try and and try and help you grow your business so um again this business plan template is available down in the description if you want to get it and follow along okay so why is your business plan important now this might sound obvious um but maybe to some others it's not and the main thing we want to do is your business plan is your demonstrating your road map to success so I want you to focus on your business plan being less about educating the audience and more about um talking through the specifics of what you're going to offer and how you plan to reach your goals what your goals are and how you plan to reach those now if you're a professional service firm is um geared or is focused around a more like novel concept or really like niche market um then maybe you need to do a little bit more educating or describing what you're doing um but don't overdo it you know the your lender does not need to be an expert in your business um in order for them to make the decision that they're going to they just need to understand and agree with and have confidence in your plan to be successful so you're going to see as I kind of scroll through here initially you'll notice that the table of contents like this business plan template is not super long um now there are a couple things it is to dispel this myth is your business plan does not have to be really long to be good um it's more important that you jam packet full of important details um in the the key highlights rather than fluff just for the sake of making it more elaborative or or more you know more detail in there and so you know if you need to go through the extracise of writing a 50-page business plan to get your thoughts down on paper and really feel like you have a a grasp and on everything then definitely do that but refine a version of that down to 20 Pages um that you're going to give to your lender because the really important details can get lost in all of the extra fluff that's in there that your lender doesn't need to necessarily not it's in order to make a decision and so keep that in mind when you're kind of refining that down now really quickly just on the structure of this business plan template you're going to see this you know recurring theme of a heading subheadings and then you're going to have a brief like one sentence explanation as to like what that subheading is calling for and then a one to two sentence example for our fictitious use case here and so don't take this business plan Temple as like law like you may need to elaborate more in specific sections you might even need to add some new uh sections for your business um this is just here to serve as kind of a guide and a starting point so that you're not starting from scratch um so just kind of keep that in mind as you're going through this but first off here we have the executive summary I want you to think about this as if it's like a cover letter for a resume for like a job application so this is a good chance you know on the very first page just to highlight some of the specifics about your business or the the key points so you can see here we've got an overview like what it is what it does where it is I don't know if I said where it is twice but that's just those highlights you want to include in there some you have short-term long-term goals you have a mission statement in here which you know that's not going to obviously this stuff isn't going to make the difference in getting improved but if it doesn't exist then your whole business plan is a little confusing if you're not teeing up the rest of the business plan for Success some people choose to include like a financial snapshot in here whether that's like startup funds you know how much what are the startup costs going to be where the sources of those funds coming from when they plan to break even Etc if that feels like you know something you want to do then definitely include that then this second section here the company description is kind of just a l an extension of the executive summary just a little bit more um I don't know legal ease it's a little more technical speak I guess than than the beginning so but still important um but yeah you can can kind of use this as a guide as you're feeling yourself okay market analysis and this is going to bring us to key Point number one they're all highlighted in the business plan template with some specific examples um so when you get this it' be kind of helpful to guide you through that now the point of the market analysis is we are trying to demonstrate to whoever is reading the business plan that there is room in the market for what we're trying to offer and if there's not room or if it's really competitive or even if it's saturated what are we doing or how are we going to disrupt that Market what are we going to offer that's new to steal some of the existing market share from another company whether that's local or national or whatever the scope of your Professional Service is um now speaking from experience on the Professional Service side sometimes it's a little bit easier to think about it and like a local scope um versus like I'm going to offer HR and talent whatever to everyone Across the Nation um because it's just it's harder to sell a company on the other side of the country um to to join you if there's not some sort of that connection in the local connection can a lot of times bridge that Gap so sometimes it's easier to start out like I live in Indianapolis to say like we're going to be a firm that offers these services to Indianapolis businesses and then as you grow you can obviously expand that reach um to to be out s side of that um and it's easier to kind of assess your competitors and and and whatnot so getting ahead of myself there what does this include obviously we want to look at the industry the local industry itself the competitors that are most you know that we think going to be the most direct competitors um who is your target client some Market opport unities and that's all good to include in here um but the key point is we want to provide some specific examples of the research that we're doing that demonstrates that there is actually room in the market for the business you might be wondering well how do I do that so one ways you could obviously pay professionally to have some market research help done um secondly there are a number of free things you can try to do um I even give you some examples here uh you can go and do some like Google has a free keyword planning tool um so you can go and see a lot of profession Services uh are heavily they heavily invest in SEO so like when someone is searching for something they they want to show up um in that search result now the example that this is filled out with which is like HR services or an HR consultant Talent recruiter that's located in Denver that's really specific and I wouldn't say that's like a super buzzwordy search term this is probably really heavily referral based um because it's very B2B it's very corporate and so you can see there's not a ton of search volume for this so this doesn't mean that this wouldn't work for you because because someone might be saying like logo designer near me logo design you know creative agency in Denver or in Indianapolis some of those other ones are going to have probably higher Search terms so that is something you can do because and then I'll point out right here you can see the average monthly searches is helpful you want to see that those numbers are bigger um but also what's really helpful is seeing the change rate the growth rate now if you were seeing these go up by 30% up by 40% and it gives you some new ideas see I only search for these three but it's giving me all these related ideas um so you can see what areas what type of search phrases what type of services are growing and trending in the right direction that you might want to try to rank for and then of course you get advertising bid ranges here which might be helpful for your case so the reason I point this out is depending upon your Professional Service Niche understanding if there is search volume and what direction it's trending might be helpful to affirm to you and to put in your business plan that there is a growing need for it that there is a market for it um if it's declining or if it's zero I don't know if that would necessarily be an indication that there isn't a market for it but that it's just not showing up here in just typical search you know SEO organic search another thing you can also do is Identify some key competitors now this is a tool called a HRS um it's not free it's also not really expensive um but this enables you to take a competitor's website and then basically just see what all they're ranking for how much traffic the website's getting um so if you plan to try and leverage SEO as a way to grow your business by you know people finding your website um organically we can go and we can kind of see well what are our competitors actually ranking for so if I this is a a boutique HR firm in Denver for example and so if we just look at the keywords at the ranking for so this is a pretty small firm they don't again this industry doesn't have a ton of search traffic it's heavily Network related referral related um but this example still stands you can come here search up your competitors see what they're ranking for and then a quick tip is if you're using a tool like this you kind of look for you want to look for keywords that are high volume that are relevant and have low keyword difficult so these are all really low because what that is a signal for is it would be easy to rank for those there's not a lot of competition to rank for those keywords so if you launch a website and start writing blog posts you know packing in these keywords and answering questions around those you could try to rank for those quickly and compete on that front so those are just some quick examples of you know how you could probably do some um market research and then include some findings from that in your business plan doesn't have to be exactly that just trying to show you some examples that like it's really good to to give some tangible demonstration of the science that's going into you identifying your Market rather than just saying like oh I know it's out there so we'll find businesses um but those are some some tools that you can consider doing for that okay moving on marketing and sales strategy so the market analysis was to try and demonstrate that there is a market you know that it does exist there's room in the market for us now what we want to do in the marketing and sales strategy and you can see is key Point number two is going to bring us here is we want to demonstrate how we're actually going to get those customers how are we actually going to attract those customers um and one great way to do this in a business plan because you might be thinking well you know it's maybe it's a startup so you don't you haven't done it yet and I totally understand that so maybe you're like well how do I how am I going to demonstrate how I'm going to get the customers if I haven't gone out and got them yet um and so this section of business plan should include the basics it should include your product description your pricing strategy your sales strategy where are you going to sell it you know you're going to have a website you're going to be on social media that should all be minimum expectations what's really going to make your business plan shine is if you can demonstrate a thing called traction which is a very common term in like the tech space and it's really just an example of momentum especially pre-launch or pre-revenue that makes traction really powerful the two best examples of traction are actual sales if you can do something to generate some money um pre-launch and two is like getting names building awareness building a following of people who are locked in and engaged and ready to you know join you in whatever you're doing and so let's look at some examples of those again Professional Services is a little less black and white on like maybe ideas you might have to get a little creative and the demonstration of track traction is going to be different based upon your industry Niche um when it comes to your Professional Service but when I was a lender the type of traction I really like to see was almost like hustle related grit related so Professional Services is a really good space where someone could actually do it on the side you know as a side hustle or as a side gig maybe while they still work full-time somewhere so maybe that's your case maybe you're doing a creative agency and I I I did this before I've done freelance marketing and Design Services on the side but I still a fulltime job and I had some some clients on the side right and if I really would have enjoyed and wanted to see that grow you can slowly add customers and then maybe you get to the point like okay I want to get a loan I want to hire a person I want to go fulltime Etc whatever you want to do there and so that's an example of of traction right if you have some sort of proof that you're like I already have some customers doing this thing that's an example of traction include that in your business plan um and then some other examples could be like you know build a social media of follow following around your specific uh expertise and build some some following and some traction there even if you're not selling something just being able to say like yeah I've got a I've got a Tik Tok Channel with 100,000 followers that are interested in HR and recruiting tips that's that's great put that in there people see you as an expert that's an affirmation that you know what you're talking about so those are some examples of customer acquisition and traction moving forward operations management this is going to be kind of about the logistics of the business itself how's the organization going to be structured who's on the team um and key Point number three is going to be relevant industry experience so it's really important that you include and demonstrate to let's say your lender that you know what you're doing and you know what you're getting yourself into and if you don't EX ex L that you have a partner or a key employee on the team that does know um what you're getting into now when it comes to Professional Service I feel like your success as a professional service really does come down to the fact that you're an expert and you know what you're doing so you probably need to have substantial experience in the thing that you're going to offer as a professional service um in order for your lender to probably be on board with what you're doing so make sure you highlight your industry experience um or related experience as much as you can in your business plan I think that's a pretty easy one for this industry okay now moving along to fin fincial projections um obviously we're a little biased we are projection hub this is what we help businesses do but even before my time with projection hub um when I was a lender this is still by far the most important part of a business plan or a loan application is spending time looking at the financial projections and so let's just do a quick scan through here we're breaking down what our startup costs are going to be um we've got some Revenue projections or forecasts in here I I know this is maybe a little hard to read but if you zoom in you can May piece but it's like a revenue breakdown net income profit uh cost to good sold um we've got some key ratios here for like gross profit margin profit margin and got a breakdown of our operating expenses we've got a fiveyear performance statement uh income statement um C fiveyear cash flow statement you can include a balance sheet um we've got some Break Even analysis and some charts and so all of those things I just showed you were actually created using this template and so I've linked this template down in the description below if you're interested just a really quick demonstration of this all the areas you see or where you input information it's all organized for a professional service or Consulting based business put any loans you have it's going to help you actually calculate how much cash you you should expect to have in order to have enough to launch your business including covering losses until you break even um you'll put in the professionals on your team that are going to be providing the services how they're compensated um how you're going to attract customers you're advertising to attract customers what are the services you're going to offer so you're going to just put in some of this information that's relevant to what you do that you already know uh about it you're going to input at your monthly you know expected expenses very easy to input and then if you have any um support staff you know that aren't the service providers in here and then it's going to generate all of those charts and financial statements for you everything that your lender is going to need or anyone reviewing your business plan is going to need you can see that in here and so that's linked down in the description below you are going to have to have projections for your business plan especially if you're trying to get financing um or investment and especially if you're a startup um you don't have to get the template obviously but if you plan to pay an accountant to do it it's going to cost a lot more money and that template is less than $100 and I'll actually give you a promo code at the end of the video yeah so Financial projections are not key Point number four because they are expected they they should be in your business plan but what is key Point number four and that is realistic Financial projections um I forgot to mention there's a video demonstration of how to fill out the whole template as well but realistic Financial projections you might be asking how do you know if they're if they're realistic and um a pretty simple answer you just go to Google and even now in the age of um like AI chat Bots you can also use a tool like chat GPT or bar to help you do this as well as much as you trust those those tools and are comfortable using them and so what I would do is again you know I I showed you the template take the look at maybe some of the projections that we've created we've got some of these key ratios for example and let's look to find out what my type of professional service industry what are some averages what are some some typical ranges that you know what's a typical profit margin for an HR and Talent recruiting firm right so if I ask a thing like that to chat GPT it's going to give me some feedback and it's going to say you know we've got 15 to 35% okay that's really helpful what did my projection say you know obviously we're going to have a loss in the first year and we're slowly growing up and then we start to get up into 7 20% 27% so that's not way out in left field um you could also do the same thing with Google okay Google is telling me 15 to 25% still within that range so you can look up any financial data point that is in your projections whether it's typical Revenue how many client should expect what is a percentage of um operating expenses compared to sales you can search up anything just to make sure they're realistic your lender is not going to have a sheet of paper that says that has to be these answers but they are going to be looking for anything that seems off or outliers so they just want to know that what you're projecting is actually possible and not you know that you're missing something obvious or um you know being unrealistic about your expectations so um it can be good to be conservative in the first couple of years but it's okay if your four or five is starting get pretty optimis optimistic um as long as initially you're kind of being conservative to account for repaying of a loan okay so that is financial projections and we are going to go through that brings us to the end of the business planing templ but we're missing one key point and that is demonstrating skin in the game I want you to think about if you're buying a house you're going to put a down payment down and the bank or your lender that's giving you the mortgage is also going to put a lean on your house so if you default on that loan you're going to lose your down payment you're going to lose your house um now I don't say that to say like the bank is coming to wreck your life and take things from you but a lot of times when I was a lender people had this expectation that they had received you know this advice that they should keep business and personal separate that is great advice when it comes to like your bookkeeping your accounting um but when it comes to like your collateral and getting a loan um that is not a realistic expectation so you should expect that A lender is going to want to see your loan collatz as much as possible in an unfortunate reality of a professional service business you don't have a lot of equipment so there's not going to be collateral you're probably not buying a building you're probably going to rent and so that's not going to be collateral so you need to be prepared to offer what you have now that might be personal assets that might be a free and clear vehicle a second lean on your home something like that at least you don't need to just come out of the gate and offer those things um but if you are demonstrating what collateral you might have available that's going to really mean a lot to your lender because it's not going to be like pulling teeth for them to try and you know pull that out of you okay so just be prepared that that is going to be a reality of um that process if you're especially if you're trying to get financing okay and that is it that's the five key points for creating a professional service or Consulting for business plan um if you like the video again give us a thumbs up that really helps us consider subscribing to the channel and I promised you a promo code it's going to be B ph20 BP would get you 20% discount off of this um I assure you by the time you open up this this is not going to say Insurance Agency it's going to say Professional Service firm uh yeah go ahead and grab that grab the template reach out to us at support projection hub.com if you have any questions we would be happy to help you and thanks for watching [Music] [Applause] [Music]