Business Plan DOs and DON'Ts

Adapted from "Three Key to Obtaining Venture Capital", by PriceWaterhouseCoopers LLP

DO be brief. Begin with a two-page executive summary. Limit the body of the plan to twenty pages. Note that internal business plan and budgets are normally more detailed than those presented to external investors. Include everything important to the business and financing decision, but leave secondary issues and information, such as detailed financial information for discussion at a later meeting.

DO let the reader know, early on, what type of business the company is in. While this may seem obvious, many plans tell the reader this information on page 20, for example, and with other plans, the reader is never certain.

DO state the company’s objectives and describe the strategy and tactics that will enable the company to reach those objectives.

DO cite clearly how much money the company will need, over what period of time, and how the funds will be used.

DO have a clear and logical explanation about the investor’s exit strategy.

DON’T use highly technical descriptions of products, processes and operations. Keep it simple and complete.

DO be realistic in making estimates and assessing market and other potentials.

DO discuss the company’s business risks. Credibility can be seriously damaged if existing risks and problems are discovered by outside parties.

DON’T make vague or unsubstantiated statements. For example, don’t just say that sales will double in the next two years without supporting details.

DO be specific. Substantiate statements with underlying data and market information.

DO summarize and properly structure internal budgets and plans to facilitate review by outside parties.

DO enclose the proposal/business plan in an attractive but not overdone cover.

DO provide extra copies of the plan to speed the review process.