One of the key steps in preparing your business plan is targeting it to the right audience. If you're seeking out financing, for example, will your plan be directed to venture capitalists, bankers, or both? Once the decisions have been made about the target audience, it is time to tailor the plan accordingly. In this excerpt from How to Really Create a Successful Business Plan, author David Gumpert offers some guidance on what it will take to make your intended audience react favorably to your plan.

Now that you've determined to whom you want to address your business plan, you need to consider what -- and how much -- that audience really wants to hear. Fred Gibbons of Software Publishing Corp. says that he intentionally kept his business plan to a maximum of 10 pages because he knew that venture capitalists appreciate brevity. And he received compliments (not to mention offers of financing) from each of the three venture capital firms he presented the plan to. He was also able to show the same plan to potential suppliers and key employees because, in addition to being easy to read, it emphasized the company's plans for aggressive sales and marketing that would lead to substantial but controlled growth.

Keep in mind -- it's possible to have two versions of a plan targeted to the same audience. Some entrepreneurs I know have written a summary plan of 5 to 10 pages and a full plan of 30 to 40 pages. If a banker or investor is intrigued by the more summary plan, the entrepreneur can present the full plan, which contains more detail.

Business Plan Targeting Summary
Audience Issues to emphasize Issues to deemphasize Length
Banker Cash flow, assets, solid growth Fast growth, hot market 10-20 pp.
Investor Fast growth, potential large market, management team Assets 20-40 pp.
Strategic partner Synergy, proprietary products Sales force, assets 20-40 pp.
Large customer Stability, service Fast growth, hot market 20-40 pp.
Key employees Security, opportunity Technology 20-40 pp.
Merger & acquisition Past accomplishments Future outlook 20-40 pp.

A useful way to evaluate the targeting issue is to compare several likely audiences:

  1. Bankers. Bankers are primarily concerned about having their loans repaid. While they will say that they are interested in a company's long-term prospects because they want to establish long-term relationships, bankers want to be assured of a company's ability to keep up a loan repayment schedule. Margins on business loans are so low that banks can't afford to have too many go sour.

    Thus, the emphasis should be on cash flow -- past, present, and future. The more convincing your past record of cash generation has been, the more likely bankers are to believe future projections. After cash flow, bankers look for tangible assets that can be sold to repay the loan in case cash flow sours. These assets don't have to be limited to those owned by the company. Indeed, many banks will insist that owners personally guarantee company loans so that if company assets don't cover a loan, the bank can come after the owners' personal property. Thus, the banks may also want a statement covering personal financial assets and liabilities.

    Such information can often be covered in a short business plan of 10 to 20 pages.