There’s a great line in the third Godfather movie. The godfather, Michael Corleone (played by Al Pacino), says, “Just when I thought I was out, they pull me back in.”
He says the line because he realized that due to certain events, he had to become involved again in the family business.
I had a similar feeling recently when I spoke at an event and was asked some questions about business plans.
You see, I have written hundreds of articles on business planning over the past decade, so I figured I had nothing knew left to write.
But since questions keep coming up, I figured I should write this essay to clarify the answers. So, below please find my answers to recent business plan questions I’ve been asked from entrepreneurs like you (and some others that I’ve seen others asking online).
Q. How important is the business plan?
A. If you are seeking funding, the business plan is critical. Most types of funding sources (e.g., angel funding, venture capital, bank loans, etc.) REQUIRE a business plan. That is, without one you can’t raise funding.
If you want to be successful, you also need a business plan. Study after study proves that entrepreneurs who develop formal business plans are much more successful than those who do not.
Q. What is the purpose of a business plan?
The purpose of the business plan is two-fold.
From a strategic perspective, your business plan documents your key goals and action plan to achieve them.
From a communications and investment perspective, your business plan shows investors/lenders that you have a well conceived business opportunity that merits their dollars.
Q. How long should my business plan be?
A. Your business plan should be 15-25 pages including the financials. It should be short enough that the investor can read through it quickly. And it should be long enough to answer the investor’s key questions and to show that you really understand the business, the market and the business opportunity.
Q. What elements or sections should I include in my business plan?
A. There are 10 key sections to a business plan. They include:
1. Executive Summary
2. Company Analysis
3. Industry Analysis
4. Customer Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
8. Management Team
9. Financial Plan/Projections
Q. Does your business plan need to include your implementation or action plan?
A. Yes, your implementation or action plan is included in the business plan. The main action plans are included in the Operations Plan section. In this section, you need to detail the key milestones (your “risk mitigating milestones”) that you must accomplish and the expected dates for each.
Your action plan must also be closely tied to your financial projections so you know how much money your company needs and when.
Q. Where can I find someone to write my business plan for me?
A. I’m clearly biased here. We have successfully developed business plans for over 2,000 clients since 1999, so I have to recommend our team here at Growthink. You can speak with one of our business plan consultants yourself and/or learn more here.
Q. Should I include my resume in my business plan?
A. Yes and no. You should not include a traditional resume in your business plan. But, in the Management Team section, you should detail the highlights of your resume, and focus on what success you have achieved to-date in your career, and how this supports your ability to successfully run/grow the business.
Q. How complete should my business plan be before I approach investors?
A. 100% complete. You generally get only ONE chance with investors and lenders. So your business plan needs to be perfect the first time.
Q. How do you cite statistics when describing your market in the business plan?
A. Particularly in the Industry and Customer sections of your business plan, you should cite industry statistics. There are two things I like to do here. The first is to include the source of the statistics directly in the text rather than footnote it.
For example, I’ll say, “According to the U.S. Census, there are …” That makes it easier for the reader to digest the information. If there are tons of citations, then you can use footnotes (but not endnotes since the reader needs to be able to access the information quickly).
The second thing that’s important is to tie the research to your company. For example, rather than just saying, “According to research from the National Restaurant Association, 18% of diners want this and that,” you should add that this fact/trend directly supports your company’s success and how.
Q. Can I list more than one product or service idea in a start-up business plan?
A. Yes. However, most successful companies start by offering just ONE key product or service. They gain success with that one product/service. And THEN, they roll out other products and services.
So, in the Operations Plan, you want to explain that you will first focus on penetrating the market with your first product or service and that once you hit a specific milestone (e.g., sell X number of units) will you develop and launch your second product/service.
Q. How important is the Executive Summary?
A. The Executive Summary is absolutely critical. If the reader isn’t excited after reading it (note that the Executive Summary should be 1-3 pages), then they won’t read the rest of your plan.
Of critical importance in your Executive Summary is to 1) clearly explain what your venture is/does and its value proposition, and 2) explain your unique success factors (what it is about you, your company, your market, etc., that makes your venture uniquely qualified to succeed).
I hope my answers also answered all of your key business plan questions. If you need more help developing your business plan, here are my best resources:
If you want to use Growthink’s Ultimate Business Plan Template to develop your plan, click here.
If you want Growthink to write your business plan for you, click here.
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