This discussion will focus on creating a quick and simple business plan. But first, we’ll take a look at why a business plan is important and the benefits gained from having one. As time goes on, there will be many more posts about this critical business tool.
Why are business plans important?
There are two basic reasons for a business plan.
- It is a map of how your business will begin and grow.
- It’s the single document bankers and lenders use to make the decision whether you get a check or not.
Creating a Simple Business Plan
So . . . you’re going to the bank for a loan. Your loan will depend on your business plan.
The average business plan of a few years ago was much longer and more complex than what we see today. That’s because business plans have become more common among bankers and investors who read them.
The trend today is to focus on the fundamentals with good projections and solid analysis. An easy to read format is more important than ever. If you want people to read the business plan you develop, keep it simple. Keep all the plan elements straightforward and short. Not to be confused with simple thinking. It just gets your point across quickly and easily. To quickly get the reader on your side, write it so it’s easy and fast to read.
Consider these specifics for a business plan to present to a lender or investor.
It’s not a novel. Effective business writing is easy to read. People will skim your plan—then they’ll focus on the numbers.
- Short sentences are easier to read.
- Buzzwords, jargon and acronyms make it harder to read.
- Use bullet points for lists,
Brevity is king. You can probably cover everything you need to convey in 20 to 30 pages of text plus another few pages of appendices for projections, resumes and supporting data. There are exceptions. A plan for a remodeler or a builder should contain photos of recent projects, testimonial letters from past satisfied customers, and appendices containing research that add weight to your assumptions.
Charts and graphs. Make your important numbers easy to find and easier still to comprehend. Summary tables and simple charts highlight important numbers. The related details belong in the appendices.
- Use two-dimensional bar charts to show, at a minimum, sales, gross margin, net profits, cash flow and net worth by year.
- For market share and market segments, use pie charts.
- Gantt chart tasks and milestones show the major tasks and milestones effectively.
- If a chart is used reference it in the text.
Look and feel is queen. Aside from the wording, make the look of your text simple and inviting.
- Use only two fonts, not three, not four, and a single font is even better for the text.
- Use 11 or 12 point size. This document is Calibri 11-pt. Avoid small fonts.
- Use abundant white space. Use 1-1/2 line spacing and generous margins.
- Use the spell-checker. Use the spell-checker. Use the spell-checker.
- Have someone else proofread and edit carefully!
- Double check that the numbers in your text and tables match.
Remember: Keep it smart. Keep it simple. Keep it brief and make sure it is well edited.
More: For more help visit Microsoft’s Business Start-up Center at https://www.microsoft.com/smallbusiness/startup-toolkit/