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Enlightening Extras for Business Plans

What exactly should you put in your business plan's appendices? Here are some ideas that'll enlighten your readers.
September 27, 2005
URL: http://www.entrepreneur.com/article/80102

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There's no one correct or comprehensive list of what you should include in your appendices. Your business, your intended use of the plan, your audience will all affect what you want to put in. Photos of a building or a sketch of a proposed development might appeal to a real estate investor. Investors in a software company won't be excited by a picture of a jewel box or a happy customer but may be interested in a flowchart. Keep your audience in mind. Ask yourself what additional information they might like you to include. Then provide it.

Make sure any facility photos you provide are more informative than glitzy. Skip over the sculpture at the entrance in favor of an outside shot illustrating that the property is in overall good repair.

Like leases, however, the value of a contract may lie in its details. So it might be a good idea to include copies of relevant sections of any really significant contracts as appendices. If the deal is as good as you think (it had better be--otherwise, you wouldn't highlight it in your plan), then exposing potential investors to the beneficial details can only do you good.

If you don't have an eye-popping contract with a marquee client, but you have a lot of lesser arrangements with more or less impressive customers, use the laundry list approach. Many plans effectively devote a page or so to a dense roster of all existing clients, conveying a positive impression of having a robust customer base.

There's no hard-and-fast rule about the overall length of a plan. Most new venture plans should be under 20 pages. And though plans for complicated enterprises can legitimately run much longer, it's probably a good idea to exercise restraint when it comes to packing things into an appendix. Recall the idea of diminishing returns, and make sure that anything you put in your plan contributes significantly to presenting a clear, compelling picture of your business.

Expert Advice
Sometimes the most interesting insights into a proposed investment come from the supporting documents. Most business plan writers know enough about the way bankers and investors read plans to provide marketing, management and financial information. A few go further and use the appendices to provide extra pieces of information that just don't fit into the main text.

Resumes are obviously important. Financial and credit information on the business and its principals, especially for a very small venture, can make a difference in the investment decision.

Here are a few more suggestions:

Ask yourself what other information your prospective investors might wish to see. The easier you make it for them the better. Their time is valuable. You can't do their due diligence for them, but they will appreciate your helping them by providing the sources of your information and the grounds of your assumptions.

David H. Bangs has been working with small-business owners for more than 20 years and is the author of 11 small-business books.