When One Business Plan Isn't Enough
Tailoring your plan for different audiences can be as easy as emphasizing different points.
A wide variety of people will be interested in your business plan, including investors, potential partners, bankers, suppliers and employees. But one plan doesn't fit all. If you want to get maximum impact from your plan, you'll need to tailor it to address the particular needs of your audience.
Venture capitalists see hundreds of plans in a year, so each plan gets very little time. It's essential that you make the right impression fast. Emphasize a cogent, succinct summary and explanation of the basic business concept, and don't stint on the details about the impressive backgrounds of your management team.
Bankers tend to be more formal than VCs and more concerned with financial strength than with exciting concepts and impressive resumes. Pay extra attention to balance sheets and cash flow statements.
Angel investors are more informal investors and require a less formal plan. Rather than going for impressive bulk, seek brevity.
Potential partners should see a plan that deals comprehensively with the ownership structure and clearly spells out matters of control and accountability.
Customers who look at your business plan are probably considering building a long-term relationship with you. Fully address your relationships with other customers and suppliers. Talk about your record on matters that deal with the customer's individual requirements. Skip trends in your industry and other sections that customers already know.
Suppliers want to make sure you can pay your bills, so include cash flow forecasts and other financial reports. Then show how you plan to grow, and you'll be in a better position to negotiate terms.
Managers in your company use the plan to remind themselves of objectives, keep strategies clear and monitor company performance and market conditions. Stress corporate mission and vision statements and analyses of current industry and economic factors. Make it easy for managers to compare sales revenue, profitability and other key financial measures against planned performance.
Employees should get a version of your plan that's been edited for their understanding and needs. It's good to be open, but if you're uncomfortable with employees knowing exactly what all the managers earn, leave this information out. Include data like rates of workplace accidents or absenteeism that would be of only peripheral interest to investors.
Limit your alterations from one plan to another to modifying the emphasis of the information you present. Don't show one set of numbers to a banker you're trying to borrow from and another to a partner you're trying to lure on board. It's one thing to stress one aspect of your operation over another for presentation purposes and entirely another to distort the truth.
David H. Bangs has worked with small business owners for 20 years. He has experience on both sides of the financial table, having been an entrepreneur and a loan officer for Bank of America. He is the founder of Upstart Publishing and author ofBusiness Plans Made Easy and Nonprofits Made Easy.