Q. In a previous article, you described the areas of a business plan that get the greatest scrutiny from potential investors or lenders. I’ve heard that most plans don’t even get looked at by their target readers. Is that true?
A. Unfortunately, yes — most plans aren’t even read by their intended audiences. These “whizzers” zip through the target readers’ hands, garnering scant attention before they come to rest in the circular file.
By virtue of the huge number of venturers seeking financing, busy capital providers can’t read every plan and proposal that comes in over the transom. Even in those instances when a plan’s cover does get turned, the reader will spend, at the most, 10 minutes – and, typically, more like five – reviewing it.
The vast majority of business plan consumers are experienced, have a quick eye and know the tricks of the trade. This first, cursory examination tells them if they want to go back and read more, pass the document on to someone who will — or consign it to the big black hole of oblivion.
Here are a few Brass Tacks Tips for getting the attention your plan deserves:
• Choose your readers carefully. Don’t shotgun your plan to a wide audience of “possibly interested” readers. Determine the identities of those parties who would have the most inclination and ability to react favorably and direct plans to them.
• Have your plan delivered to the reader by someone who knows both the reader and your company. Plot out the “six degrees of separation” between you and the people who can do your company the most good and ply the network that is revealed. You want your plan placed in the hands of target readers by intermediaries they know and trust.
• Make sure the essential components of the plan – the key proposition, marketing plan, financial plan, purchasing/manufacturing plan, etc. — are labeled and identified in an easy-to-find and -read table of contents You want readers to find their personal areas of interest in seconds.
• Keep the plan terse and tight; the thickness of the document is inversely related to the probability of its being read. The ideal business plan is about 50 pages in length, not counting special exhibits or appendices. There is no minimum number of pages, assuming the full story is told.
• Provide an executive summary that will get readers up to speed quickly and snag their interest so they will delve deeper into the plan. The summary should be no more than three pages long – not easy, especially for someone who knows and loves their venture as much as you do.
• A lot of people do judge a book by its cover. Use color if possible and prominently display a statement, challenge or quotation that reflects the philosophy of your business and challenges the prospective reader.
• Make sure you mark the plan “CONFIDENTIAL”. It should not be allowed to wind up in a competitor’s hands.
• Write out each section of your plan and then rewrite it, using, at most, half the words originally employed. It is more difficult to write a 100-page business plan than it is to write a 1,000-page plan.
• Don’t depend on words alone. Use relevant illustrations, exhibits, graphics, charts and photographs .CDs can be used to great advantage here, and most readers have a PC with which they can access them. Better yet, narrate key portions of your plan as an audio CD that your “targets” can listen to in their car or some other non-office locale, thus saving precious time.
• Look as intelligent as you are. Many readers (justifiably) use spelling ability and proficiency with grammar as surrogate indicators of the writer’s talent and ability.
• Number the pages. Make it easy for the reader to take notes and key them to the pages in the plan that they reflect.
• Add some sizzle. If your company name is less than inspiring, try to introduce a sobriquet or slogan that will freshen the identity of the firm. Experience shows that the name of a company is important to the typical reader of a business plan.
• When the primary purpose of the business plan is the procurement of funds, be specific about how much the firm needs; explain how the funds will be used (financial schedules are essential in this regard). Explain any high-tech product or complicated process in simple terms, and emphasize the experience and talents of management, since this is what the funds-provider is betting on.
• Use good quality paper stock. Make sure all the pages are printed legibly and are the same size. Bind everything, including the letter of transmittal, in one document.
• Once the plan is completed and in circulation, keep changes to a minimum. Frequent alterations suggest insecurity or instability in management.
Paul Willax is a professor of entrepreneurship and chairman of the Center for Business Ownership Inc., Amherst, N.Y. He also is the author of the book, “Brass Tacks Tips for Business Owners,” available at barnersandnoble.com. If you have a question or suggestion for his column, or to receive a free, weekly e-mail newsletter, “Brass Tacks Brainfood,” write to Willax@TheBrassTacks.com.