The Length of Your Business Plan
There is no set answer to the question, how long should it be? A plan needs to be long enough to fully explain the opportunity, the market, and how the management team is qualified to execute their strategies. Most investors find that 15-25 pages is ample space for a business plan. Any longer and you run the risk that an investor short on time will have to skim certain sections of the plan, which could cause them to overlook key sections of the plan. Any shorter and the investor might not take the plan seriously and might think the business has not been fully developed.
Many entrepreneurs believe that their company is too complex to describe in 15 to 25 pages. While that may be true, the business plan is not meant to provide every detail about a firm. Rather, the company must be concentrated into its essential components. If an investor is interested, there will be plenty of additional time to tell the whole story.
Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company’s value proposition within a short document.
While the body of the business plan should be 15 to 25 pages, the Appendix section can be used for supplemental information. The Appendix should include a full set of financial projections, and perhaps, technical drawings, partnership and/or customer agreements, market data, expanded competitor reviews, and lists of key customers.
If the Appendix is lengthy, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick business plan, which will make a negative impression before they even open it up.
To summarize, the goal of the business plan is to create interest. In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Condensing a business plan to a concise, compelling document is challenging and time consuming. Fortunately the rewards are worth the effort.