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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