Of course, if you are trying to attract investors, you will need to furnish more details; but if the goal of your business plan is to keep you, your partners and employees on track and prepare for the future, you can trim it down to the basics.
Here, business experts tell us which business plans features are essential and which you can live without.
The Skinny Business Plan Credit: Scale image via Shutterstock
It may be time to put your business plan on a diet. Experts say the document doesn't need to go on for dozens and dozens of pages, include endless descriptions of your products or contain excruciatingly detailed financial projections. Instead, your business plan needs to just get to the point.
Of course, if you are trying to attract investors, you will need to furnish more details; but if the goal of your business plan is to keep you, your partners and employees on track and prepare for the future, you can trim it down to the basics.
Here, business experts tell us which business plans features are essential and which you can live without.
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"There are business plans for external use, but there should also be an internal business plan that is a living, breathing document that changes with your business, " said Steven Raz, co-founder and managing partner of Cornerstone Search Group, an executive search firm specializing in pharmaceutical and biotechnology. "It can be 10 pages or less and should really be a selling document that grabs you."
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For starters, you need an executive summary that quickly provides a hook, said Christian Seale, chief operating officer of Equitable Origin, which has created a responsible certification program designed to promote higher social and environmental standards, greater transparency, and more accountability in oil and gas exploration and production.
"You should summarize the problem or opportunity and address how your company's product or services will address a need," he said. "You also want to briefly summarize the team that is in place and the skills they have to make it happen."
The condensed business plan needs to include a description of the product and a description of potential consumers, experts said. "This should be backed up by a brief analysis of who current competitors and potential competitors will be, explaining how the product differs from other offerings," said Mark Cracknell, co-founder and executive director of Kondoot.com, a social network that lets members broadcast live to family and friends for free.
While you need to make the case for your product or services, too many business plans get bogged down with pages of market research, experts said. "While this may be necessary as you look for investors, keep that to a minimum to make the business plan manageable," Seale said.
While you can still include financials, don't overload the plan with data and projects and present relevant information in bright, colorful chart formats. "In this document you are not reaching exclusively financial people and potential investors, so make the information accessible," said Raz.
In a more brief business plan, exceedingly detailed analysis of expenses can be left out. "Depending on the product and industry, it can be very difficult to gauge exact expenses when dealing with unknown growth factors," Cracknell said. "If the figures or amounts cannot be determined with a reasonable amount of accuracy, then it's best to leave them out."
Cracknell added that there should also be a brief history about who started the company and its origins, he said. "You need to communicate how the business came about and the view going forward," he said.
Sales and marketing strategy are also important elements of the slimmed-down business plan. "This is always fluid, but putting it in writing as things change help you to remain focused," said Beth Goldstein, president of Marketing Edge Consulting Group and directorof the $50K New Venture Competition at Boston University.
The best business plan is a finite and defined outline of key acts by specific dates, said
Nicholas L. Turner, co-chief executive officer for Kaye/Bassman International Corp., which provides strategic recruiting and executive search services.
He said developing a formal business plan goes against the grain of many entrepreneurs. "If you put too much detail, you will never get it done, you will never adhere to the map and you will feel restricted from a dynamic capacity to be the entrepreneur," he said. "I say adapt the plan to you, not you to the plan. A business plan is a tool to use, not the objective to accomplish."
The only reason do it is for funding and if it is legit funding, you hire a professional company to do it for you, Turner said.