Do Business Well

Now that you’ve determined whom you want to addressyour business plan to, you need to consider what—and howmuch—that audience really wants to hear. Fred Gibbons of Software Publishing Corp. says that he intentionally kept his business plan to a maximum of ten pages because he knew that venture capitalists appreciate conciseness and brevity. And, indeed, he received compliments (not to mention offers of financing) from each of the three venture capital firms he presented the plan to. He was also able to show the same plan to potential suppliers and key employees because, in addition to being easy to read, it emphasized the company’s plans for aggressive sales and marketing that would lead to substantial but controlled growth.

Business Plan Targeting Summary
Audience	Issues to emphasize	Issues to deemphasize	Length
Banker	Cash flow, assets, solid growth	Fast growth, hot market	10-20 pp.
Investor	Fast growth, potential large market, management team	Assets	20-40 pp.
Strategic partner	Synergy, proprietary products	Sales force, assets	20-40 pp.
Large customer	Stability, service	Fast growth, hot market	20-40 pp.
Key employees	Security, opportunity	Technology	20-40 pp.
Merger & acquisition	Past accomplishments	Future outlook	20-40 pp.

Keep in mind. . . It’s possible to have two versions of a plan targeted to the same audience. Some entrepreneurs I know have written a summary plan of 5 to 10 pages and a full plan of 30 to 40 pages. If a banker or investor is intrigued by the more summary plan, the entrepreneur can present the full plan, which contains more detail.

A useful way to evaluate the targeting issue is to compare several likely audiences:

Bankers. Bankers are primarily concerned about having their loans repaid. While they will say that they are interested in a company’s long-term prospects because they want to establish long-term relationships, bankers want to be assured of a company’s ability to keep up a loan repayment schedule. Margins on business loans are so low that banks can’t afford to have too many go sour.

Thus, the emphasis should be on cash flow—past, present, and future. The more convincing your past record of cash generation has been, the more likely bankers are to believe future projections. After cash flow, bankers look for tangible assets that can be sold to repay the loan in case cash flow sours. These assets don’t have to be limited to those owned by the company.

Indeed, many banks will insist that owners personally guarantee company loans so that if company assets don’t cover a loan, the bank can come after the owners’ personal property. Thus, the banks may also want a statement covering personal financial assets and liabilities.Such information can often be covered in a short business plan of 10 to 20 pages.

Possibly related posts: (automatically generated)
Targeting Your Plan

• Targeting Your Plan continue...
• Making a Plan: how to construct a simple and workable business plan part 6
• How Your Business Situation Helps Shape Your Plan
• Previewing the Business Plan: The Best Type for You
• Campaign Checklist: What goes in a campaign brief?
• How Will You Promote Your Product or Service?
• Ask Yourself: Would You Invest?
• Personally Presenting the Plan
• Packaging Issues
• What All Plans Must Cover

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