Anyone who has contemplated writing a business plan must decide upon an appropriate length. If you are a frequent reader of business plans, then you probably complain that they are too long. Alternatively, if you are passionate about your new innovation, technology or process, then you might feel that more detail is needed, to help explain why the investment opportunity is so special. This divergence of opinion often results in ambiguity when determining what the right length should be.
Before I proceed to articulate my opinion on this topic, let’s first consider the following: Most readers of your business plan will never read it in its entirety, regardless the number pages, how well it is written or what neat images are included. If you can embrace and accept this concept, then it will force you to think differently about what length is best … worse case, your choice will only impact a small percentage of total readers!
Following in this theme, I am sure you can now realize that it is absolutely critical your business plan includes an Executive summary.
Regardless of how busy your reader is, most will spend the time to read a single page for a glimpse of the business opportunity. It is for this reason that your Executive summary is the most important page of your entire plan.
Here is where Pareto’s law comes into effect – only 10 to 20% of your plan (the Executive summary) will likely be read by 80-90% of your readers. How well you write that section will determine, to some extent, how much (or if) the rest of the plan will ever be read.
Next, if you follow my logic, the rest of your business plan may only be read by 10-20% of your readers. These folks are now engaged and interested. Your topic has appealed to them in some way, so now you have them “hooked.” They are now willing to make a time investment to learn more. It is this group, therefore, that we must seek greater understanding, to then best determine an appropriate length to satisfy their needs.
My logic follows this path:
- 2-3 pages on the industry and market challenges
- 1 page to describe the company and its mission
- 1-2 pages to describe your product or service
- 2-3 pages to describe your competition and how you will compete
- 1-2 pages for a marketing plan
- 1-2 pages to describe the management team
- 1-2 pages for the financial projections, in summary; detailed monthly proformas can be included as an appendix
If you add an Executive summary to the above pages, you will have a plan that is anywhere from 10 to 16 pages, plus appendix.
Practice has taught me that the extra effort to add more pages is seldom worth it, nor will it really help you to better sell your idea to an investor. Of course, if your product is highly technical and requires a more thorough product description to really get it, then your plan might need to be longer. That is fine, and may well be the right answer. But, if that is the case, you might simply want to take a different path, and offer a technical guide as a supplement instead. After all, not all of your readers will be highly technical – they will likely get lost with greater technical descriptions. This extra content won’t really help you with your objective to secure funding, or better describe your idea to start building your company or new product.
What do you think? Have you experienced different results? I would be interested to hear from you.
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.
