To begin, the key point to consider in developing your business plan is
the time restraints of your audience. If your audience is a retired angel
investor, he may have few obligations and can spend an hour reviewing your
business plan. However, the more likely scenario is that a venture
capitalist, corporate investor or loan officer will review your plan while
sitting at a desk topped with fifty other business plans. As such, it is
critical that your plan conveys its key points quickly and easily this is
where graphs or charts come in.
In determining whether to use a graph or chart, consider the old adage, a
picture is worth a thousand words. The point here is that the picture should
save a thousand words. That is, the graph or chart should supplement the
text; it should not be explained ad naseum in the text, or that defeats its
purpose. Likewise, the graph or chart must be relevant and support the text,
rather than detract from it.
In addition to respecting the time constraints of the audience, the
business plan must respect the audience s energy level. That is, after
reading seven business plans, an investor is likely to skip a page with 400
words of straight text. Even if no charts are applicable to support the
page, Growthink suggests using appropriate spacing and/or callout boxes
(e.g., key text phrases highlighted in boxes) to make the page more
readable.
Clearly, technical drawings and operational designs need to be visually
presented in the business plan. Without them, huge volumes of text are often
needed to explain relatively simple processes. Importantly, when the text
references these charts, the charts should be easily accessible. That is,
the chart should be on the same page as the text, rather than forcing the
audience to continually turn to an appendix. If the chart is referenced on
numerous pages, each page should show the piece of the chart that reflects
the text, with the full chart appearing only once in the plan.
Finally, if the business plan is being presented to one or few investors,
the amount of graphs and charts should reflect the wants, needs and
sophistication of those few readers. For instance, if the plan is being
presented only to strategic investors who understand the market, more graphs
may be appropriate to convey information for which these investors already
have background knowledge.
Conversely, always keep in mind that the plan is not a slide
presentation, and too many graphs and charts may position the company as one
that is too lazy to complete the process of developing a formal business
plan.
To summarize, the amount of charts and graphs used in the business plan
must reflect the audience for the plan; an audience that is usually time and
energy constrained. The charts and graphs must complement the text, enable
the audience to quickly and easily digest the information, and as always,
interest the audience in taking the next step (e.g., scheduling an in-person
meeting) in the investment process.
