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Bankruptcy InformationHow to Use Graphs and Charts in Your Business Plan
by:
Dave Lavinsky
Many a folk ask how many a graphs or charts they should have in their business plans. As with most different business planning questions, the answer is “it depends”. This article discusses the key factors influencing the number of graphs and charts to include in your business plan.
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 much likely scenario is that a venture capitalist, corporate capitalist
or loan officer wish review your plan patch sitting at a table
flat-topped with fifty different business plans. As such, it is critical that your plan conveys its key points quickly and easily – this is wherever
graphs or charts move in.
In deciding whether to use a graph or chart, consider the old adage, “a image is worth a thousand words.” The point here is that the image 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 keep the text, rather than bring down 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 capitalist
is likely to skip a page with 400 words of straight text. Even as if no charts are applicable to keep the page, Growthink suggests mistreatment appropriate spacing and/or callout boxes (e.g., key text phrases highlighted in boxes) to do the page much readable.
Clearly, technical drawings and operational designs need to be visually conferred in the business plan. Without them, brobdingnagian volumes of text are often necessary to explain comparatively
simple processes. Importantly, once
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 documented
on many
pages, each page should show the piece of the chart that reflects the text, with the full chart attendance only once in the plan.
Finally, if the business plan is being conferred to one or few investors, the figure of graphs and charts should reflect the wants, necessarily and sophistication of those few readers. For instance, if the plan is being conferred only to strategic investors who understand the market, much 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 a graphs and charts may position the institution as one that is too lazy to complete the process of developing a formal business plan.
To summarize, the figure of charts and graphs used in the business plan must reflect the audience for the plan; an audience that is commonly time and energy constrained. The charts and graphs must complement the text, alter the audience to quickly and easily digest the information, and as always, interest the audience in taking the next step (e.g., planning
an in-person meeting) in the investment process.
Just about the author:
As President of Growthink Business Plans, Dave Lavinsky has helped the institution become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have conjointly raised over $750 million in financing, launched many
new product and service lines and gained competitive advantage and market share.
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