What Makes a Great Business Plan?
As with most topics, there are many differing thoughts on what makes a great business plan. However, the experience of having completed 1,000’s of them, and the accolades following from the financial institutions and private investors, as well as the success rate, indicate that ours are superior to many others.
Most business owners or executives are simply too busy for it, or they attempt to write it and realize how arduous it is. A great business plan is much more than just content and financial forecasts; anyone can fill in the blank templates on the internet, or hire someone for $500 to do one, but they are poor at best. The methods that differentiate an ordinary business plan from a great one are the intangibles. Of note, I will not address business plans for internal company use, as that is a topic all of its own.
Once the information on competition, industry, market, and operation is gathered, and financial projections are completed, the business plan must be structured into a logical flow of sections. Generally speaking, most of what you find online will have the proper structure. I will not get into the structure here, but essentially you want similar sections together, starting with a top-level macro focus and moving towards more micro-level detail as you progress (You can have a look at the sample business plan on our website). When writing, it is very important that you ensure the grammar, punctuation, and spelling are correct. Here is where the intangibles begin.
“A goal without a plan is just a wish.”
― Antoine de Saint-Exupéry
Tone, Aesthetics & Key Elements
The tone and aesthetics of the report depend on a few factors including the industry you’re in, the audience you’re presenting to, and your personality.
The first is important because you would not word or design the plan for a restaurant the same as a pipeline construction company. The first might be more upbeat with wording that tantalizes and appetizing pictures and colorful graphs. The latter would be more conservative with stronger wording and more industrial pictures and charts. Possibly, you would have a larger appendix with engineering drafts and designs. Similarly, you would also not write a fast food restaurant plan the same as for a fine dining restaurant. The former would have lighter-hearted wording, photos, charts, and fonts, the latter might be more elegant in all these respects.
The second not only affects tone and aesthetics but also which sections get the most focus. For a government grant the report would be more academic and straight-forward with limited graphics, a conservative tone, detailed statistics, and financial forecasts, a lot of references, and in some cases, be over 60 pages. In respect to financial institutions, the smaller trusts and credit unions, for competitive reasons, tend to be less conservative than the major banks. They focus on the stats and financials a great deal, but making the plan aesthetically pleasing is of benefit as well. The focus is generally more professional for the larger banks than smaller ones, and here solid references are important as well with the number of pages being in the 40 to 50-page range, give or take. Keep in mind that these are general comments as it can also depend on the person at the institution that you’re meeting with. In the case of private investors, the focus and tone changes quite a bit. In all cases, the financials are important, and they all want to know you have done your homework; but with a private investor there is also a primary focus on the individuals involved, their biographies, and the successes they have had in the past. The report should be upbeat and include a lot of action verbs, and if it is between 30 and 40 pages, that is usually fine. They can be impatient and normally don’t want to spend too much time reading through all the market and industry info. The report needs to be positive, as this group also tends to rely on their gut instincts. Remember where each group is coming from. Representatives of the government and banks must be concerned with what their bosses will think if something goes awry, so they are wary. Private investors are at the end of the line, they answer to no one but themselves so they will look at your bio, your personality, and the idea much more than the other groups. Organizations such as the BDC are somewhere in-between financial institutions and private investors, but leaning more toward the financial institutions. Others, such as landlord requests, are basically a summary of a business plan. They are usually 10 to 15 pages – similar in length to an investor’s deck but less aesthetic. If you’re creating an investor’s deck, follow the same guidelines as you would for a private investor business plan.
Finally, there is your personality. I am sometimes asked if I can guarantee that our business plans will get a client their funding. I cannot. It not only depends on the quality of the business plan but also how well it is sold and whether or not the personality of the business plan and business owner are in concert. In essence, at the end of the day, the business plan must reflect the personality of the business owner, not the business plan writer. For this reason, we like the owner/entrepreneur to be actively involved in the process. It also tends to move forward much quicker when this is the case. If the business owner is a high energy, enthusiastic individual some of these attributes should be shown in the business plan. Likewise, if the business owner is very conservative and low key, it is better if the business plan shows elements of this. Hopefully, their personality somewhat matches the industry they are in as it can be a bit tricky otherwise.
We hope these tips will help you on your way to completing a great business plan. If you’re looking for more information on how we can assist your organization, or to view a sample business plan, please contact us today.