I read a few hundred business plans a year, either on behalf of my business or on behalf of clients looking to acquire businesses. Most of them are terrible !!!.
Here are some of my thoughts for business plan writers – wherever you are, and whoever you are – if you’re going to produce a plan that I have to read some time:
1. Convert it to PDF. I’m not interested in reading paper-based versions. If I want to print it I will. I like to travel light, and paper just clutters up my office and adds to the weight I travel with.
2. Make it an appropriate font size. Most readers of business plans will be over 30 and many will be over 40. Therefore minimum font (point) size is 11, but 12 is preferred. If you can’t fit your business plan into 20 pages without making it an 8pt font then you’re just not trying hard enough !!.
3. Make it about the business, not the science. I want to see target markets, channels, sales, costs, exit strategies, defensibility, scalability, and things like that. I’m not going to read about your science – except for checking that it’s real and that you have the appropriate IP protection.
4. Summarise well. Make sure you hit the high points. Don’t ever let me finish your business summary without knowing what you’re selling to what market, why they’ll buy it, what it does for them, how much money you think you need, how fast and to what sales level you can scale up, strengths, core competence, and a quick sense of your team.
5. Tell me stories. Make me understand what problems you solve, for whom, and how they find you. Make that story credible. Give me some real examples, real situations, real people, and make it believable.
6. Show me milestones: That is milestones you’ve achieved, and milestones you need to achieve.
7. Don’t give me dumb profits. If you’re going to generate margins at twice the average industry levels, then you better have a convincing reason for why that’s possible. When I see huge profitability, it doesn’t make me think you’re going to be amazingly profitable; it makes me think you don’t know the business you’re in.
8. Show me your patents if you have them but if you do, show me something about how defensible they are (if at all) and make sure your projections include legal expenses to defend them.
9. Show me you know something about cash flow: Inventory management if you have products, receivables and collection days.
10. Think of your reader. We don’t all have hundreds of plans to read, but whether it’s for angel investing, VC, Banks or Business Acquirers, Business Brokers we all do read more than just a handful.
Feel free to contact me if you need help getting your Business Plan into shape before you take that next step with your business.