How to Draw Up a Business Plan: Telling the Story with Graphics

By: Eric Powers Click author's name for more of his/her articles

A business plan does not have to be a monotonous, text-only document. In fact, your plan may be more successful if it is not. After reading many plans of this type, investors and lenders are always ready to see a plan which uses images, charts, and graphs to better tell its story, as long as these graphics fulfill their purpose. The following are a few suggestions of where images or graphic layouts can be used to good effect in a business plan, although they are by no means the only options.

Customers and Competitors

Since your customer groups and top competitors must be listed in the plan, why not use a chart to summarize this information? This can be a good method of showing the differences and similarities between customer target markets and competitors. To better illustrate how competitors will compare to your intended business, include your business as a row on such a chart as well. Furthermore, images or logos that better inform a reader about customers or competitors can be of use here and help to break up the monotony of research.

Industry Market Share

If you can find the information, it is always easier to communicate how market share for a given market is broken up between competitors using a pie chart. If you cannot find this precise information in your research, you may still be able to extrapolate such a chart through smart assumptions and the bits of information you can find.

Products and Services

If you are creating a new product or service, showing images can generally illustrate them better than the same space in text, even if they are just charts of the product or service delivery system prototype. If full diagrams of the design of a system are necessary, these may be better placed in the appendices of the plan and mentioned earlier on. However, if a picture can replace a great deal of text, it is highly recommended here.

The Real Purpose of a Business Plan

A business plan for a startup venture is most successful if it serves three purposes: attracting outside funding, helping the managers think through strategy, and providing a road map for future action and evaluation. Many business plans end up serving only one or two of these purposes, leading to problems for the business and contributing to the high rate of new business failure.

Attracting Outside Funding

Most startups cannot launch without funding from investors and lenders beyond the founders of the company. For most funders, reading a business plan is an important preliminary (but not the only) step to choose who to fund. The business plan must attempt to convince funders to move on to direct talks with the founders, to go through their own process of due diligence, and to move on to negotiations over the financing deal. The business plan cannot convince funders to give money on its own, but it can easily kill the company’s chances of getting outside funding it finds to be lacking.

Thinking Through Strategy

A business plan also serves the purpose of letting entrepreneurs “make mistakes on paper” before making them in wasted dollars, cents, and time. Putting the plan on paper allows time to consider how the elements of a strategy complement the research done and the resources of the firm. It also allows advisors and other managers to give feedback on the plan of action.

Creating a Road Map

When kinks are worked out, the plan becomes an excellent tool to direct the company with. It should include the high level actions the firm must take, which can then be broken down into specific schedules and actions by the company’s manager or managers. As time goes on, managers can return to the plan and its financial projections to judge the progress of the company, how successful the planning was, and whether company is following the plan well.

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About The Author: Eric Powers is associated with Growthink, a business plan consulting firm. Since 1999, Growthink business plan writers have developed more than 2,000 business plans. Call 800-506-5728 today for a free consultation. Or, if you're writing your plan yourself, go here for more tips and advice: www.growthink.com/products/business-plan-template.