Thursday, 27 September Startup Smart
My business plan is too long. What should I hack out?
This article first appeared on June 1st, 2011.
I’m in the process of starting a restaurant booking site. I’ve written a business plan for it but it’s absolutely huge. I’m starting to think investors will be put off by all of the detail I’ve included.
What should I hack out? What kind of superfluous stuff is unnecessary in a business plan?
Clear, simple and direct business plans must have proposed costs, revenue projections, projected balance sheets and management details.
It also helps to have a short history of your other business experiences over the past few years and the reason that you believe that your venture is going to go.
Think about your business plan the same way that the chef thinks about creating her next menu – it has to have all the ingredients that the customers want and have what’s necessary to make the restaurant succeed as a business.
A good business plan is first and foremost a guide to doing what has to be done to make your venture work, then it is an aide to getting the support of others, but ultimately it is the path to the core job of any business – creating new customers and rewarding the investors.
The right size is not a question of the number of pages or an excess of detail but how easy it is for the reviewer to see that you have been through a thorough planning process.
The essential elements of your business plan are:
- An introduction to the product or service provider.
- Details of the management team and structure.
- A statement of the vision, mission and objectives.
- A step-by-step guide to goal achievements.
- A competitive analysis that shows where you fit.
- A feasibility study that summarises cashflows.
- A simplified marketing plan and troubleshooting.
- Investment opportunities and guidelines.
When you have got all this down to a business menu, get your accountant and your family to pick it to pieces, ask you questions and take out anything that is not sufficiently clear to somebody who is not as passionate about your prospects.
As with the restaurant menu, you need to offer enough to tempt the investor but ensure that the relationship with the operator is the key rather than the ingredients or how the whole thing is put together.
Leave the details to an appendix or a supplementary report that addresses specific questions that may be raised by potential business partners, including business licenses, names of bankers and accountants, solicitors, publication details.