If you are an entrepreneur, you already realize that a professional business plan is essential to raising capital.
A very common question asked about the business plan involves the length, just how long should a good business plan be?
If you are wondering about the proper or optimum length there is a simple rule, it should not be longer than is necessary to spark the interest of financial investors – but not so short that your investors are left wondering about your understanding of the business.
Most business plans are in the 15-25 page range, but that is simply the quick answer, which leads to a number of other questions most commonly the following:
1. Exactly how long should the Executive Summary be?
Think of the Executive Summary as the hook, the part of your business plan that will motivate investors to continue reading the rest of your plan. Ideally this should be around 1-4 pages in length and do a good job of snagging their attention.
2. Is the Appendix included in the 15-25 page range?
The short answer is, it depends. If you have an extremely large appendix, say ten or more, it will need to be a separate entity from the other sections of your plan. The Appendix will need to include all your financial projections and back up the claims in the financial plan and your Executive Summary.
It will also depend upon how complex your business is, you may wish to include various other backing documents such as: direct and indirect competition, competitor reviews, partnership and customer letters of interest, technological documentation (patents, drawings and proprietary information) as well as a comprehensive list of the customer demographic your business serves.
One nice thing about separating the Appendix from the business plan is that it will appear more manageable to potential investors.
Form and Function
Remember that your business plan is somewhat like a good story in that the length is not nearly as important as the content. If you can keep your audience glued to the pages throughout the entire business plan, you have done your job. Also, keep in mind that this is merely the first step to getting investment dollars, in other words the plan does not convince them to fork over the cash but to grant you a meeting. Investors are busy people and this can be a tall order! Once you are in the door then you will be able to get a real shot at earning their approval for initial investments.