If you want people to invest in your idea, my advice is to write a simple business plan. Don’t confuse your business plan with a doctoral thesis or the back of a napkin. Keep the wording and formatting straightforward, and keep the plan short. For minimum content, see my article “Investors Expect Ten Essentials in a Business Plan.”
The overriding principle is that your business plan must be easy to read. This means writing like an average newspaper story (at about eighth-grade level). Most readers will barely skim your plan – even trying to read it while talking on the phone or going through their e-mail – so keep it simple.
However, don’t confuse simple wording and formatting with simple thinking. You’re keeping it simple to communicate your point quickly and effectively to team members and investors. With that in mind, here are some specifics updated from an old article on simple plans by Tim Berry:
- Keep the plan short. You can cover everything you need to convey in 20 pages of text. If necessary, create a separate white paper for other details. A one-page business plan is an excellent executive summary, but it’s insufficient to secure an investment.
- Polish the overall look and feel. Aside from the wording, you also want the physical look of your text to be inviting. Stick to two fonts in a standard text editor, like Microsoft Word. The fonts you use should be standard sans-serif fonts, such as Arial, Tahoma, or Verdana, 10 to 12 points.
- Use simple sentences. Short sentences are the best because they read faster, and comprehension is higher among all audiences.
- Avoid buzzwords, jargon, and acronyms. You may know that NIH means “not invented here” and KISS stands for “keep it simple, stupid,” but don’t assume anybody else does.
- Simple, straightforward language. Stick with simpler words and phrases, like “use” instead of “utilize” and “then” instead of “at that point in time.”
- Bullet points are good. They help organize and prioritize multiple elements of a concept or plan. But avoid cryptic bullet points. Flesh them out with brief explanations where explanations are needed. Unexplained bullet points usually result in questions.
- Don’t overwhelm the plan with too many graphics and flashy colors. Pictures and diagrams can effectively illustrate a point, but too many come across as clutter.
- Use page breaks to separate sections. Each section or chapter should start on a new page. Page breaks can also highlight charts and tables.
- Use white space liberally, spell-checker, and proofread. Include one-inch margins all around. Always use your spell-checker (Grammarly Premium is especially useful). Then, proofread carefully to ensure you’re not using unintended but correctly spelled words (e.g., to, too, or two).
- Include a table of contents. No investor likes searching every page for key information like executive credentials or exit strategy. Any word processor can automatically generate a table of contents from your section headings. Learn to use this feature.
Investors hear from too many entrepreneurs who envision a great business opportunity but don’t have a written business plan. These entrepreneurs think they can talk their way to a deal. It won’t work. On the other end of this spectrum are business plans with lengthy product descriptions with a few financials at the end. This is a failing strategy as well.
If you’re not the type who can connect with people based on a simple message told succinctly, then hire someone who can. Simplicity and readability are among the most effective strategies for selling even the most complex proposal. A business plan that is easily understood and looks professional is already half sold. Simple is smart.