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Based on experience reviewing hundreds of business plans for new and small businesses mainly in the "tech" space, I drafted the following list of common mistakes and flaws seen in plans. Follow them if you want to write a truly dreadful business plan and avoid them if you wish to write a good plan:

  • Don't include a contents list, don't number any pages and don't follow any consistent approach for section heading etc.
  • Do write the plan's summary before you write the plan, or, better still, don't include any summary.
  • Do develop your business strategies and ideas progressively as you write the plan. It will draw readers into the process and make the ending more unexpected !
  • Do start the plan with your financial projections - the more detail and tables the better !
  • Don't summarize the projections - let readers figure out the full-year totals, profits, cash flows and so on for themselves.
  • If you include projected balance sheets, make sure that they don't balance.
  • Don't produce any separate cash flow forecasts, just rename the P&L or income projections.
  • Do ensure that your financial projections indicate 40% profit margins in the third year. If raising external capital, do explain that the projected return to investors will exceed 100% per annum within three years.
  • Do mention in the marketing section that your proposed offering has no competition. This will save you having to do any market analysis.
  • Do base the plan's marketing section around a few quotes from research reports that you found on the web.
  • Don't consider customer behavior, needs or trends unless you wish to present a series of supportive (unresearched) theories that will support your plans.
  • Do base your sales projections on the presumption that you will gain, at least, a 1% share of the total market and don't bother with any market segmentation.
  • Do pad out your sales plan with lots of buzz words like customer-driven, first-to-market, market-led. Do underpin it with a disproportionately small (or large) marketing budget but don't be too explicit as to how, where and when it will be spent.
  • Don't include any background to your business idea/invention, progress to date or current status.
  • Do spend at least ten pages describing your offering - do make this as detailed and technical as possible to impress your readers. Don't mention any benefits as these should be obvious !
  • Do anticipate technical breakthroughs and new offerings but don't discuss related costs or risks.
  • Do include a 6-8 page CV for yourself but don't worry about building a management team or sorting out operational issues like production, delivery etc. Do make some heroic assumptions about these matters and do pledge to address them at a later date.
  • Do spend as little time as possible on the plan but do make sure that it runs to at least sixty pages even if this entails lots of padding and inclusion of superfluous or irrelevant material.
  • Do use as wide a variety of font types, sizes and colors as possible to add style to your plan and don't bother using a spell checker.
  • Don't let a qualified outsider see your emerging plan and don't bother with reading over or redrafting.

More seriously, if you reverse each Do and Don't, you'll have a useful guide for preparing a sound business plan. You can get this list in a printable checklist format at Checklist for Better Business Plans

For further help, see Insights into Business Planning, Business Plan Guide and the white paper on How to Write a Business Plan.

How long should it take to write a business plan and how should the time be allocated?

Some useful answers to these questions can be gleamed from an ongoing survey being conducted by PlanWare amongst people who have prepared written business plans.

Based on over two thousand responses, more than one-third (38%) of the respondents spent less than a month on their plan; a similar proportion (37%) worked on their plan for 2-3 months; and the balance (25%) spent several months on the task. More detailed analysis of these findings indicated that:

  • The elapsed time to prepare comprehensive plans was considerably longer than that for basic plans.
  • Over one-third of all plans compiled within an elapsed time of one month were used to seek bank loans or approvals from shareholders/directors, or they were compiled for internal/personal use.
  • About one-third of all plans used to raise venture capital/equity took least three months to research and write.

The survey also showed that the task of actually writing the plan was usually the least time consuming part of the planning process as almost two-thirds (63%) of respondents spend more time researching than writing their plan. For a fifth (21%) of respondents researching and writing times were about equal. Only a small minority (16%) undertook little or no research before drafting their plan.

For more findings, see a detailed analysis of the survey findings and the latest survey results.

Length of a Business Plan

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What is the ideal page length of a business plan? Well, what is the length of a piece of string? The answer really depends on the purpose and scope of the plan - are we talking about a basic or comprehensive plan.

Analysis of findings from an ongoing survey about business plans by PlanWare indicates that the main parts (i.e. the body of plan excluding appendices etc.) of many basic plans are under ten pages long whereas comprehensive plans are often 10-25 pages long. More specifically, the analysis found that almost half of all comprehensive plans were at least 26 pages long as compared with just one-tenth of basic plans (see Fig 3 below).

image003

When budgeting your plan's length, go for the shortest possible plan consistent with your business's scale, objective of the plan etc. - aim for quality rather than quantity! Bear in mind that the overall length of the plan is likely to increase as writing progresses. If your plan gets too long, do some ruthless editing and redrafting. If it is any consolation, it should be much easier to shorten a long plan than to lengthen a short one!

Based on the suggested section lengths in our Business Plan Guide, the length of a comprehensive plan could range between 27 to 47 pages (excluding cover, contents list and appendices). This works out at a minimum of about two pages for each main section within the plan. Obviously, this length should be scaled back to about ten pages or so for a new or established business (of almost any size) preparing a basic plan by excluding sections and scaling back the length of remaining sections.

Before any detailed work commences on writing a comprehensive business plan, you should:

  • Clearly define the target audience
  • Determine its requirements in relation to the contents and levels of detail
  • Map out the plan's structure (contents page)
  • Decide on the likely length of the plan
  • Identify all the main issues to be addressed.

Shortcomings in the concept and gaps in supporting evidence and proposals need to be clearly identified. This will facilitate an assessment of research to be undertaken before any drafting commences.

Bear in mind that a business plan should be the end result of a careful and extensive research and development project which must be completed before any serious writing of a plan should be started. Under no circumstances should you start writing a plan before all the key issues have been crystallized and addressed.

For more tips and suggestions, check the white paper on Writing a Business Plan and Free-Plan our free 150-page Business Plan Guide and Template (Word format). Also, refer to the 30-point Checklist for Preparing a Business Plan.

Twelve things to do when writing your business plan:

    1. Create a framework for the plan e.g. table of contents.
    2. Identify possible appendices, attachments etc.
    3. Estimate page lengths for each key section.
    4. List main issues and topics to be covered within key sections.
    5. Assign work programs based on the framework and lists.
    6. Draft all key sections in a logical sequence.
    7. Check the preliminary draft for completeness and plug gaps.
    8. Stand back and take a detached overview of the draft.
    9. Let an outsider or adviser critique the latest draft.
    10. Redraft, fine tune and spell check.
    11. Write the executive summary and plan's conclusion.
    12. Get an independent assessment of the final draft.
For further help, see the Business Plan Guide, Writing a Business Plan and Insights into Business Planning.

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