What Your Business Plan Should Include
No, dear visitor, we aren't going to answer that with a long and
detailed recitation of the components. Even the outlines we
provide for you -
Click here to see them
- are not exhaustive.
Instead, here are some thoughts that our experience has
taught us helps every plan writer to decide just what to
include, or not include, or how to deal with a particular topic.
- Focus on the reader - what he/ she wants to know. This is
probably the most important, and most abused, point.
Consider these critical basic points
- Is the company focused on a specific niche or industry
segment?
- Does the company have a sustainable competitive
advantage?
- Does the company have the experienced management to
be successful?
- How much capital does the company need to be
successful?
Answer those questions thoroughly and
you will have solved a major question about what to
include.
- At first glance, you might be tempted to think, "Those are
factors an outside investor or lender would focus on... we
aren't planning on bringing in outsiders." We respectfully
suggest that you think again - those go the very heart of every
business and if you have not addressed them, you are at
risk.
- Speaking of risk, we are often asked how risks should be
handled - should they be mentioned or not? While it is
obviously a judgment call, our thoughts are that it is your
credibility on the line. If you have identified a risk in your
strategic planning or
SWOT analysis
, you should also
have identified what you are doing /planning to overcome that
risk. If it is of a magnitude to affect the business, we think the
reader would have more confidence that you have seen it and
are prepared to handle it, rather than ignoring it.
- Two of our critical basic points above highlight extra risk in
a family business. ...experienced management to be
successful. Unless the family business is rigorous in
obtaining and developing its management according to what is
needed to make the company successful rather than
according to family hierarchy and membership, there will be
more risk.
[Click here to learn about the question: Is Your Family Business A Battleground?]
When a family business has good
practices and there will be outside readers, our feeling is that
this area should be mentioned in order to show the reader that
it is a problem identified and solved. How much capital
does the company need... If the family business is being
used or is expected to be used to fund family needs over and
above business operating needs, this will be anticipated and
should be dealt with. Especially in an investment or lending
situation, the potential invest or/ lender will likely assume this
will happen unless you show clearly how it is not going to
happen.
- And that leads to a frequent question..."How long should
my business plan be?" To which our answer usually
has to be: "It depends... " But our experience suggests that
typically 20-50 pages should be sufficient if it is for outsiders
such as potential investors, lenders, customers, family
members who do not participate in the operations. But one of
the biggest potential uses we identified above is for internal
purposes - managers, employees, Board of Directors or
Advisory Board
. Here, the detail is more
appropriate so the
presentation would be longer.
- Another tricky issue revolves around confidential
information - whether or not to include it in your business plan. Obviously, if you have only one business plan or version of it, it is going to be tricky to make this fit
for all readers. However, if you are flexible and can produce
variations according to your readers' needs, it is easier. Our
experience is that confidential information will have to be
disclosed at some point, so have it available. But, there is no
need to have it in every copy - especially copies that are
widely distributed. So your Executive Summary and business
plan can refer to this information but not disclose it.
A non-disclosure agreement is definitely the solution
here.
- Given the many different users we identified above, it
follows that there could be more than one appropriate length
and content. And that is exactly right. There is no reason why
there can't be more than one "version" - each with content
focused on its audience. This is perhaps particularly true of
the executive summary... this is the first page the reader will
hit and you have about 90 seconds to grab their attention or
lose it, so write it well for each use. Obviously, we are not
suggesting a full different plan for each reader... after all your
business is the same no matter who you are telling about it...
but the level of detail that is relevant for each level of reader is
different.
- Suggested resource that allows you to create a winning business plan quickly and easily. Click here to learn more.
Growthink's Ultimate Business Plan Template
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Family Values and
Business Systems
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