Growthink Finds that 60% of Business Plans are Too Long

Highlights Growthinks's discovery that most business plans are too long for investors to effectively review. Details what potential new business owners can do to combat these problems and achieve the optimal business plan length.

  • Share on TwitterShare on FacebookShare on Google+Share on LinkedInEmail a friend

Los Angeles, CA (PRWEB) February 5, 2005

Growthink announced today that over half of new companies make the mistake of developing business plans that are too long for investors to effectively evaluate. The question is then, how long should the ideal business plan be?

According to Growthink, 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. From surveys of investor needs, Growthink has found that 15 to 25 pages of text is the optimum length in which to accomplish this. However, in reviewing hundreds of business plans in the last year, Growthink found that over 60% went beyond the length preferred by investors.

The long length of these plans forces the time-constrained investor to skim certain sections of the plan, even if they are generally interested, which could lead them to miss essential elements. However, if the plan is too short, the investor will think that the business plan has not been fully developed, or he or she will simply not have enough information to make an investment decision.

Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the business plan is not meant to tell the whole story. Rather, the company must be “boiled down” into its essential elements. If the investor is interested, there will be plenty of additional time to tell the whole story.

To summarize, the goal of the business plan is to create interest – not to have an investor write you a check. In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. As Mark Twain once said, “If I had more time, I would write a shorter story.” Likewise, condensing your business plan to a concise, compelling document is challenging and time consuming. Fortunately the rewards are significant.

About Growthink

Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share. Growthink has become the firm of choice for venture capital firms, angel investors, corporations and entrepreneurs in the know. For more information please visit http://www.growthink.com

Contact Information

Growthink

1800 Abbot Kinney Blvd., Suite B

Los Angeles, CA 90291

Tel: 877-BIZ-PLAN (877-249-7526)

Fax: 310-943-2693

Email: info@growthink.com

###