Business plan

Keep your business plan simple

Opinions expressed by Entrepreneur the contributors are theirs.

When I started working with business plans in the late 1970s, the average plan was much longer and more complex than what I see today. This may be because business plans are more common than before – they are being used more and more often and by more people. It could also be a matter of trends among bankers and investors who read business plans. Or maybe it’s because people have less time to waste sifting through documents!

Whatever the reason, the current trend in business plans is to go back to basics, with good projections and solid analysis. An “easy to read quickly” format is more important than ever. If you want people to read the business plan you develop – and most people do – then my best advice to you is to keep it simple. Don’t confuse your business plan with a doctoral thesis or a lifelong task. Keep the wording and formatting simple and keep the outline short.

But don’t confuse simple words and formats with simple thought. The reason you keep it simple isn’t because you haven’t fully developed your idea. You keep it simple so you can get your message across quickly and easily to whoever is reading it.

With that in mind, let’s dive into some details when it comes to simplifying your plan.

Hold your prose. Effective business writing is easy to read. People will skim your plan, they’ll try to read it while talking on the phone or checking their email. Save the deep prose for the great American novel you’ll write later. When developing your plan, remember these tips:

  • Don’t use long, complicated sentences unless you have to to make sense. Short sentences are good and they are easier to read.
  • Avoid buzzwords, jargon and acronyms. You might know that NIH stands for “not invented here” and KISS stands for “keep it simple, stupid,” but don’t assume someone else does.
  • Use simple, direct language, such as “use” instead of “use” and “then” instead of “at that time.”
  • Bullets are good for lists. They help readers digest information more easily.
  • Avoid “naked” chips. Flesh them out with brief explanations where explanations are needed. Unexplained fleas can be frustrating.

Be brief. The average length of most business plans is now shorter than before. You can probably cover everything you need to convey in 20-30 pages of text plus another 10 pages of appendices for monthly projections, management resumes and other details. If you have a plan longer than 40 pages, you’re probably not summarizing very well.

Of course, there are exceptions to the rule. I recently saw a plan for a coffee shop chain, for example, that included photos of the proposed location, menu mockups, and maps of other proposed locations. The graphics made the shot longer, but they added real value. Product photos, location photos, menus, maps, floor plans, logos, and signage photos are helpful.

Use trading charts. Make your important numbers easy to find and easy to understand. Use summary tables and simple business charts to highlight key figures. Make related details easy to find in appendices. Also…

  • Use bar charts to show, at a minimum, sales, gross profit, net profit, cash flow, and net worth by year.
  • Three-dimensional bars appear smoother, but two-dimensional bars are generally easier to read. Make sure the numbers are obvious.
  • Stacked bars make it easy to see totals. If your sales are divided into segments, stack the bars to show the total.
  • Use pie charts for market share and market segments.
  • Display tasks and milestones as horizontal bars with labels on the left and dates at the top or bottom. Most people call it a Gantt chart. Show only major tasks and milestones because too much detail makes these charts hard to read.
  • Always place source numbers near charts in a summary table so that readers can quickly refer to them and recognize numbers in charts. And never leave a business plan reader unable to find a chart’s source numbers. It’s frustrating.
  • Don’t use a table without referring to it in the text. If the source numbers are not completely obvious in the summary tables, be sure to specify which appendices contain the detailed numbers.

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

  • Stick to two fonts for your text. The font you use for headings should be a simple sans serif font, such as Arial, Tahoma, or Verdana. For body text, you should probably use a standard text font, like Century, Times Roman, or Book Antigua.
  • Avoid small fonts. Only a few of the most readable fonts are suitable for 10 point; most of them are best at an 11 or 12 point size.
  • Use page breaks to separate sections and to separate graphics from text and to highlight tables. If in doubt, skip to the next page. Nobody worries about having to go to the next page.
  • Use white space liberally. Words crammed into small spaces are uncomfortable to read.
  • Always use your spell checker. Then, proofread your text carefully to make sure you’re not using an incorrect, correctly spelled word! Check that your text numbers match those in your tables.