I stumbled on a very interesting article that lead me to a very interesting competition. The article appeared in the New York Times on Friday 16 April with the following heading, “Can You Write a Business Plan With Fewer Than 140 Characters?” The article was written about a competition being run by the Massachusetts Institute of Technology (MIT) in conjunction with their MIT $100K annual business plan competition.
They call it the TWITCH (Twitter Pitch) contest. And this brings me to the topic for this article, “How long should your business plan be?” Here are some of the advice you may find on the Net:
- It can vary from a 10 to a 100-page document;
- It should be short enough to not bore your reader;
- The shorter, the better;
- Shouldn’t take up more than 25 pages;
- Limit the plan length to 15 pages;
- 15 to 25 pages is the optimum length;
- Basic plans are under ten pages;
- Comprehensive plans are often 10-25 pages long;
- Length should be 20 to 30 pages max;
- Can be any length.
The general feeling is that shorter is better. A few factors should dictate the ideal length of your business plan.
The nature of your business – The simpler the shorter, the more complex or “new” the longer.
Purpose of the plan – To raise millions may have to explain a lot more.
We personally believe that the shorter the better as long as it achieves its objective. One expert said that “A business plan needs to be whatever length is required to excite the investor, prove that management truly understands the market, and detail the execution strategy.”
The “empathy” test, once the business plan has been done, is to put yourself in the shoes of the audience and to ask yourself if you would have done what you want them to do based on what you see and read.
If the plan does not pass your “empathy” test there may be several reasons for that and one of them may be incomplete information. This will require that you add more pages.
If one looks at the advertising industry the greatest challenge is to sell a product on the TV in a 30 seconds commercial. Can you sell your plan in 30 seconds? We therefore go for the “Short is good, long is bad.” approach. When we look at the various areas that should be covered in more detail we will endeavour to indicate how long each section should ideally be.
In the next article we’ll have a look at the concept of the “elevator speech” and how that can become a powerful tool in business planning.
Happy planning. Make it a challenging, exciting and creative experience.