How many pages should be in your business plan? This was a question I was asked recently. Before answering, I decided to throw the question back and ask the business owner how long he thought the business plan should be.
His answer was indicated by holding two fingers about an inch apart obviously 47 pages……
I then asked the question “why do you want a business plan?”
This question is crucial. Because the reason you need a business plan will determine how much content and so the length.
My answer, predictably is, it depends.
Let's look at the different scenarios.
1. Raising Money
If you are raising finance money, requesting an overdraft or seeking an Angel investor then your business plan will be substantial. It needs
2. A set of appendices including items such as cash flow forecasts, activity calendars.
These two allow a reader to get the general gist of what is happening and some financial data quickly.
3. The middle part of the document contains lots of juicy information.
This is common for a money raising business plan. You include all your thinking in the business plan so an investor or banker can see how you arrived at the answer.
Do you remember doing mathematics at school? Amazingly you could pass the exam without getting any of the answers correct, providing you showed that you followed the right process.
Investors want to be reassured that you have
2. A Plan for the Board
Another scenario when you would require a large business plan is for the board to approve. The board have to answer to shareholders hence the necessity to ensure the plan is right and of course their legal duty too.
This might also include an advisory board, a non exec board or your shareholders and or investors or the bank.
This type of business plan isn't generally as long as the raising finance business plan but it is bigger than normal. The reason that the board, shareholders or your bankers are asking for this documentation is because they want to check how you are progressing against your current business plan and what the next 1, 3 or 5 years is forecasting. They will want to see any reforecasting or adjustments that you have made in light of changes in the market.
3. Small Business Working Plan
In our world, a business plan for the majority of businesses (who don't require finance) is 3 Pieces of Paper™ business plan. This consists of
1. A one-page business plan written essentially in bullet points, short statements and is something that could be understood by everyone in the business. This also includes a lean start up plan, quite often based on Business Model Canvas
2. This is your cash flow forecast or your financial forecast or your financial plan. It has a number of different names but essentially it shows the movement of money coming and going out and cash balances throughout the period.
3. The final piece is an activity or action calendar. I like a wall calendar. This holds all the activities and key dates which are mapped out by date. I know a lot of people like e-versions, but the advantage of a wall calendar is you get to see the whole year in one go. And so does the rest of the team.
So back to the original question how many pages should be in your business plan?
In 95% of the cases I will say 3 Pieces of Paper™. For the remaining 5%, who are looking to raise significant amounts of finance or Angel investment by equity then it is a much larger document. Perhaps even 47 pages!
Even if you do need a 47-page plan then you should distil that into the 3 Pieces of Paper™ for communication, implementation, and checkpoints.
Raising money even in the best economic situation is a challenge but we can help prepare you, your business and your plan to ensure the very best possible opportunity for success.
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