How long should a business plan be?
Having written thousands of business plans over the past 20+ years, the answer is simple.
A business plan needs to be whatever length is required to excite the investor or lender, prove that management truly understands the market, and detail the execution strategy.
From surveys of investor needs, Growthink business plan consultants have found that 15 to 25 pages of text is the optimum length in which to accomplish this. Any more and the time-constrained investor will be forced to skim certain sections of the plan, even if they are generally interested, which could lead them to miss essential elements. Any less and the investor will think that the business has not been fully thought through, or will simply not have enough information to make an investment decision.
Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the business plan is not meant to tell the whole story. Rather, the company must be “boiled down” into its essential elements. If the investor is interested, there will be plenty of additional time to tell the whole story.
These essential elements, taken from our business plan template, are as follows:
- Executive Summary
- Company Overview
- Industry Analysis
- Customer Analysis
- Competitive Analysis
- Marketing Plan
- Operations Plan
- Management Team
- Financial Plan
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 fewer pages.
While the business plan writer should make the body of document between 15 and 25 pages, the Appendix can be used for supplemental information, thus potentially making your full plan longer.
The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.
If the Appendix is long, if you a printing it out, 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 them queasy before even opening it up.
To summarize, the goal of your business plan is to create interest – not to have an investor write you a check.
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. Rather, it will take more time. As Mark Twain once said, “If I had more time, I would write a shorter story.”
So, in answering how long should a business plan be, you can keep it short, yet quite compelling and comprehensive. While condensing your business plan to a concise, strong document is challenging and time consuming, fortunately the rewards are significant.