In the course of my role as finance broker I receive business plans pretty much every day. To say they are a mixed bag would be a huge understatement. Just a few have been so obscure that I still don’t understand what the business was. Occasionally the ‘fag packet’ analogy is taken a bit too literally.
Quite a few hit the mark squarely – but the majority let themselves down to varying degrees in 2 key areas:
- They are written from ‘inside’ the product or service. I.E. The author wants to tell us all about what they do, not about the business itself.
- They are over-long – sometimes impenetrable – full of waffle, superlatives and unsupported promises.
It is impossible to know how many of the latter have been written especially for funders and whether a proper plan exists back at base; unfortunately the myth that you have to write a special plan for funders still persists. So firstly, let me save you a lot of time & perhaps money.
The first thing any experienced person will do with your plan is deconstruct it. They will pull out all of the waffle, the glitz and the promises and extract core data and verifiable facts. Always assuming that they can be bothered. They might just bin it if it is too waffly.
So, before you try to impress yourself, your friends, your bank or your customer with 100 glossy pages of brochure combined with novel, there are 2 things you need to remember.
- It is your business and your plan. If it works for you it will work for others. If it doesn’t work for you there is no point pretending.
- It is a business plan – you might say a strategic plan – not a brochure or sales prospectus.
KISS – Keep it short & sweet. A clear concise business plan has 3 key parts:
Introduction (or Executive Summary):
Think of it as your 3 minute pitch on Dragon’s Den or a concise precis covering the business is goals, strategy and opportunity.
3 paragraphs will normally suffice.
Tells us enough to understand what you are about & want to read further.
Fleshes out the individual facets of your strategy with just enough detail to inform without boring or distracting.
Hence it is relevant the the owners/directors have significant experience in xxx, but this isn’t the place for CVs. We need to know how you undertook market research and what the broad outcomes and conclusions were but the full statistical breakdown shouldn’t be in the body of the plan.
The body of the plan is about how you are going to run the business, your market, your strategy, your structure, your marketing (in its widest sense) and your strengths & weaknesses.
For most small businesses 2 or 3 pages will suffice in the body of the plan.
All of the plan is subject to change, but the body of the plan is semi-permanent.
Appendices are the chop & change area of the plan, the place where you can guide different people to information that is of specific relevance to them.
There is really no limit to appendices as long as they are clearly navigable and accurate. The point is that you don’t distract your audience from the body of the plan, you invite them to read in more depth when they are ready.
Appendices might include terms that are likely to change without notice or undue impact such as floorplans, menus, promotional material, models specifications etc.
Or they might be hard details such as detailed results of market research, CVs and technical specifications.
Wise use of appendices makes you plan targeted, readable & adaptable.
The appendices will also include your all-important cashflow projecions – as topic in its own right!
If you keep to the 3 point plan you will make your own life easier and you will increase readership & response from your audience.