How long should a business plan be? What’s the right length? How much detail should be included?
This post will share our experiences in writing business plans (with real-life examples), and hopefully, it will be helpful when writing your business plan.
So, how long does a business plan need to be?
The answer is it depends.
The purpose of a business plan is to communicate the value the Company will provide, get funders excited about the opportunity and be a roadmap for execution. For some businesses, that can be accomplished with a 20-page business plan, but it may be 50 or even 100 pages for a more complex start-up.
Bob wanted to start an exciting and unique technology business.
Bob was an expert. He knew his craft inside and out.
Bob started writing his business plan and had over 50 pages of technical information about his product.
We were impressed with the technology, but we had no idea how he would make a profit.
After working closely with him, we got his business plan down to 35 pages that were straightforward, easy to read and understand. The business plan was detailed enough to demonstrate precisely how the business would operate and how it would be profitable, but not too detailed to the point where it was not valuable.
However, we didn’t throw out all the technical information. We placed it as an appendix to the document to be available if the reader wanted to learn more about the technical specs.
Bob’s plan is an excellent example of the balance needed to cover all the critical components without having too much detail that detracts from the overall plan.
Kathy had the opposite problem.
When she came to Business Plans Canada, she thought her business plan was pretty much done and just wanted us to look it over before sending it to her bank.
Not enough detail about her service and the value proposition was entirely missing.
After working with Kathy, her revised business plan had a clear value proposition and a strong plan moving forward. We cut out a lot of jargon that was difficult to understand and improved the flow and readability of her plan.
Kathy’s business plan went from 20 pages to 35 pages.
The critical thing to remember about your business plan is not the length of the plan but the quality of the details included. By quality, we mean that it has all the critical sections covered and that the information in these sections is detailed enough to paint a clear picture for the reader.
What Are The Sections Of A Business Plan?
Although Business plan sections vary from business to business, some key areas should be part of all business plans. Typically, a business plan includes the following sections:
- Executive Summary – This section includes the purpose and objective of the business. It also describes the market and its industry.
- Company Description and Products &/or Services – Sometimes, these two sections are combined, and other times they are separated. Regardless, all business plans need to have information about the organization’s products and/or services and the Company’s operating structure.
- Market Analysis – The industry description and outlook are described here, and the target customer and relevant trends are identified.
- Key Competitors – This lists the existing competitors of the business in today’s market. It provides the prospective investors with an idea of the degree and level of competition. The presence of competitors is an indicator of the likelihood of success of the business.
- Marketing and Sales Strategy – This section provides the basic marketing plan of the business. It covers the product development of both goods and services and determines the approach for reaching the target population.
- Financials – It’s essential for readers of the business plan to understand how much money the Company needs to start and the funding sources. This section should cover all of this and describe how the Company plans to be profitable by clearly articulating the revenue streams and anticipated operating costs.
The one thing we hope you get from this blog post is not to focus on the page length of the business plan. Instead, look critically at your plan and determine if it has all the essential elements described above.
- Is my plan easy to read?
- Does it have a clear value proposition?
- Are the market and competitor research sections sufficient to describe how the Company will compete?
- Have I described how I will reach my target customer?
- Are the financial projections reasonable and easy to follow?
If you answered yes to all of these questions, you have a solid business plan.