Business plans are strange documents. Because they involve dream businesses, people tend to pour their emotions into them and lose all objectivity.
Depending on your requirements, a business plan is an internal roadmap with milestones that you define. Or it’s a document you present to a bank officer for a loan. Or it’s a proposal you submit to angel investors or venture capitalists for funding.
In my opinion, the best business plans are simple documents that state how you can solve a problem that plagues your prospective customers. The worst business plans are bloated behemoths with pages and pages devoted to redundant market analysis, over-optimistic pro forma financials, and needless paragraphs about your intended marketing tactics.
Business plans entered the mainstream in the late 1990s and early 2000s, due to all the “dot-com” start-ups that got funded by venture capitalists and angel investors. Lots of mistakes were made during the feeding frenzy. Check out the Business Plan Archive and you’ll see what I mean.
Shortly after the dot-com bust, my cousin put business plans on my radar. He wanted my help in creating a web-based comic book, and he had a business plan-in-progress (with a template from bplans.com, I think). I remember being intimidated by the scope of the business plan, and especially in writing all of the sections. Keys to Success, Management Summaries, and Market Analysis, oh my! I remember calling Diamond Distributors to determine statistics about buyers and bothering sellers at the San Diego Comic-Con about their demographics. I think I spent weeks staring at the plan-in-progress, paralyzed by all the moving parts. We ultimately abandoned the project, but what I remember most about the experience was how daunting an essentially simple process became.
Eventually, I moved to Portland, Oregon, and – wonder of wonders – worked for a start-up business plan writing company. During that time, I wrote or edited thousands of plans for all levels of intended investment. Under the tutelage of my managers, I saw how simple these plans truly were, and how they were made complex by the fears of our clients.
And, honestly, the vast majority of those documents were not true business plans. They were certainly full of business-speak and many were bona fide technical documents (with pages devoted to discussing virtualization, software-as-a-service, and net metering). But few followed the KISS (Keep it Simple and Straightforward) model, and quite frankly, I had to do what the clients wanted me to do. If they wanted bloated docs, that’s what I gave them.
What do I think constitutes a good business plan? Define the problem of your intended market, have a cogent solution, know your total addressable market (TAM), list your top services/products, have a marketing strategy in place, write concise bios of the principals, and build reasonable pro forma financials. Make sure the text is consistent, well-supported, and free of careless typos. Thirty-five pages, tops. That’s the baseline, of course. If you know your investor and s/he wants a 50-100 page document, then by all means … bloat away!
Dozens of the plans (even the big ones) I worked on went on to receive funding. I made sure the funded documents were either well-written or well-edited, but all credit for convincing the investor to fund the business lies with the entrepreneur. The entrepreneur pitched the concept/model well, understood the market, and knew how to deliver a return that was worth the initial cash outlay.
As a freelance writer, I can write or edit a business plan for a start-up or existing business. Contact me at firstname.lastname@example.org for more information. **Please note that my business plan services are not low cost. If you are on a tight budget, I know several writer/editors who can write business plans. I’m also acquainted with some talented and experienced financial modelers.
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very useful article. A+++