It may be time to put your business plan on a diet. Experts say the document doesn’t need to span dozens and dozens of pages, include endless descriptions of your products, or contain excruciatingly detailed financial projections. Instead, your business plan should just cut to the chase.
Of course, if you’re trying to attract investors, you’ll need to provide more details; but if the goal of your business plan is to keep you, your partners, and your employees on track and preparing for the future, you can strip it down to the bare essentials.
Here, business experts tell us which business plan features are essential and which you can do without.
“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 the pharmaceutical and biotechnology fields. “It can be 10 pages or less and really should be a sales document that appeals to you.”
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To get started, you need a summary that provides a quick hook, said Christian Seale, COO of Equitable Origin, which has created a responsible certification program designed to promote higher social and environmental standards. greater transparency and accountability in the oil and gas exploration and production sector.
“You need to summarize the problem or opportunity and explain how your company’s product or services will meet a need,” he said. “You also want to briefly summarize the team in place and the skills they have to make it happen.”
The condensed business plan should include a product description and a description of potential consumers, experts said. “This should be supported by a brief analysis of who the current 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 enables members stream live to family and friends for free.
Although you need to defend your products or services, too many business plans get bogged down with pages of market research, experts say. “While this may be necessary when looking for investors, keep it to a minimum to make the business plan manageable,” Seale said.
Although you can always include financials, don’t overload the plan with data and projects and present relevant information in clear, colorful graphical formats. “In this document, you’re not exclusively addressing financiers and potential investors, so make the information accessible,” Raz said.
In a shorter business plan, an extremely detailed analysis of expenses may be omitted. “Depending on the product and industry, it can be very difficult to gauge exact spend when it comes to unknown growth factors,” Cracknell said. “If numbers or amounts cannot be determined with reasonable accuracy, it is best to leave them out.”
Cracknell added that there should also be a brief history of who started the company and its origins, he said. “You have to communicate how the business came about and the vision for the future,” he said.
The sales and marketing strategy are also important elements of the lean business plan. “It’s always fluid, but writing it down as things change helps you stay focused,” said Beth Goldstein, president of Marketing Edge Consulting Group and director of the $50,000 New Venture competition at Boston University.
The best business plan is a finished and defined outline of key acts on specific dates, said
Nicholas L. Turner, co-CEO of 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 in too much detail, you’ll never get there, you’ll never buy into the map, and you’ll feel limited in a dynamic ability 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 be used, not the goal to be achieved.”
The only reason to do it is for funding — and if it’s legitimate funding, you’re hiring a professional company to do it for you, Turner said.