How to Sell Your Business, page 9

Business Plans and Offering Memorandum, continued

The contents of a Business Plan are not set in stone. In fact, the Business Plan is a staging event: an opportunity for you to present your business in its best light, to include your hopes, dreams, and stratagems along with cold, hard facts.

There are a number of relatively inexpensive software packages available that can be used to create a Business Plan. You can learn what categories and topics should be included in your Business Plan from this software, but I otherwise do not believe it is terribly helpful. The Business Plan that you generate from this software will not be a top-quality professional custom job. You can probably learn more about writing a Business Plan from one of the numerous books that are available on the topic.

It doesn’t hurt to get educated on what might (or should) be in a Business Plan, but my recommendation is against trying to write yours yourself. Very few business owners or entrepreneurs have the writing or planning skills needed to come up with a world-class Business Plan. (Since a good Business Plan includes graphics, and is well designed, these skills are also needed.)

The best bet is to work with a writer and/or consultant who has the necessary skills. (A business broker can probably make some recommendations.) Likely, you will be contributing ideas and background information—and certainly approving the results. A good business plan prepared by a third-party will cost you upwards of $10,000—the first of many expenses you will have if you want to sell your business.

A good Business Plan should be attractive and contain clean business graphics. It should tell the story of your business. Business Plans that lack an underlying narrative element appear disorganized or boring. The reader will perceive the plan that way, but not understand why. While presentation definitely does count, of course it is the clarity of the underlying business strategy—and its likelihood of success—that matters the most.

The Business Plan should start with a Confidentiality Notice and include a Table of Contents. Usually, the body of the plan begins with a summary (or overview). It should include information describing company products, the market for the products, competitors, and customers. The strategic plan should be described in detail outlining possibilities and pitfalls. Finally, company management, investors, and financials should be addressed.

There is no set length for a Business Plan (in urban legend, some have been famously sketched on a cocktail napkin). But the best plans are probably between ten and forty pages.

When a residential house is staged for sale, the staging is done to emphasize the best features and obscure the worst features. Similarly, the cunning business plan author displays the business at its best by maximizing coverage of exciting areas and minimizing discussion of those items that are problematic.

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