A Simple Business Plan

A Simple Business Plan

When I first started running with business plans back in the late 1970s, the average plan was much longer and more complex than what I see today. That might be because business plans are more common than they used to be--they're used more and more often and by more people. It might as well be a matter of trends among bankers and investors who read business plans. Or it could be because people have less time to waste wading through text files!

For whatsoever reason, the trend in business plans these days is to go back to the fundamentals, with good projections and solid analysis. An "easy to read quickly" format is more significant than ever. If you require people to read the business plan you develop--and most people do--then my best advice to you is keep it simple. Don't confuse your business plan with a doctoral thesis or a life task. Hold on the wording and formatting straightforward, and keep the plan shortly.

But don't confuse simple wording and formats with simple thinking. The reason you're keeping it simple, isn't because you haven't got your idea fully. You're keeping it simple so you can get your point across quickly and easily to whoever's reading it.

With that in mind, let's go down to some specifics when it comes to simplifying your plan.

Rule in your prose. Effective business writing is easy to understand. People will skim your plan-they'll try to understand it while talking on the phone or going through their e-mail. Pull through the deep prose of the great American novel you'll write later. When you're crafting your plan, remember these points:

    Don't use long complicated sentences, unless you have to for meaning. Short sentences are ok, and they're easier to read.
    Avoid buzzwords, jargon and acronyms. You may know that NIH means "not invented here" and KISS stands for "keep it simple, stupid," but don't assume anybody else makes out.
    Use simple, straightforward language, like "use" instead of "utilizes" and "then" instead of "at that period in time."
    Bullet tips are good for lists. They help readers digest information more easily.
    Avoid "naked" bullet points. Flesh them out with brief explanations where explanations are required. Unexplained bullet points can be frustrating.

Keeping it short. The medium length of most business plans is shorter now than it used to be. You can probably handle everything you need to convey in 20 to 30 pages of text plus another 10 pages of appendices for monthly projections, management resumes and other details. If you've started a plan that's more than 40 pages long, you're probably not summarizing very well.

Of course there were exceptions to the rule. I lately saw a plan for a chain of coffee shops, for example, that included photos of the proposed location, mock-ups of menus and maps of other proposed locations. The graphics made the program longer, but they added real value. Product shots, placement shots, menus, blueprints, floor plans, logos and signage photos are useful.

Use business charts. Create your important numbers easy to find and easy to understand. Use summary tables and simple line charts to highlight the main numbers. Make the related details easy to notice in the appendices. Also...

    Use bar charts to read, at a minimum, sales, gross margin, net profits, cash flow and net worth by year.
    Three-dimensional bars look slicker, but two-dimensional bars are usually easier to understand. Make sure the numbers are real.
    Stacked bars make totals easier to see. If your sales divide into segments, stack the bars to show the total.
    Use pie charts for market share and market segments.
    Record tasks and milestones as horizontal bars with labels on the left and dates along the top or bottomMost people predict this a Gantt chart.t. Indicate only the major tasks and milestones, because too many details make these charts hard to read.
    Always set the source numbers close to the charts in a summary table so readers can reference them quickly and recognize the numbers in the charts. And never leave a business plan reader unable to discover the source numbers on a chart. That's so frustrating.
    Don't use a chart without referencing it in the textbook. If source numbers aren't totally obvious in the summary tables, make sure you specify which appendices contain the detailed numbers.

Love the overall look and feel. Away from the wording, you also want the physical look of your text to be simple and inviting. So my advice to take:

    Stay put to two fonts for your text. The typeface you use for headings should be a simple sans-serif font, such as Arial, Tahoma or Verdana. For the body text, you should probably employ a standard text font, like Century, Times Roman or Book Antigua.
    Avoid making the fonts too small. Just a few of the more readable fonts are fine at 10 points; most of them are better at an 11 or 12 point size.
    Use page breaks to separate sections and to separate charts from text and to highlight tables. When in question, go to the next page. Nobody worries about having to turn to the following page.
    Use white space liberally. Words crammed together into little spaces are uncomfortable to read.
    Always use your spell-checker. Then proofread your text carefully to be certain you're not using a properly spelled incorrect word! Double check that your text numbers match those in your tables.