Why You Need a Business Plan Appendix
- September 24th, 2014
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Your business plan is the primary means of communicating all of your company’s pertinent details to a wide audience, but not all of its contents necessarily need to be reviewed by everyone who picks it up. For this reason, you should draft a business plan appendix, but only provider it to readers as needed.
Suppose that a creditor is looking through your business plan in order to decide if her firm is going to lend money to your company—you’ll want to make sure that she has access to all of the financial documents referred to in the financial projections section. However, if someone is reviewing your business plan for another reason, perhaps they don’t need to know the specifics of your company’s cash flow—that person won’t need to be given your business plan appendix.
Your Business Plan Appendix Should Include:
- Personal and Company Credit History
- Key Managers’ Resumes
- Photos of Products
- Reference Letters
- Market Studies
- Relevant Book References or Magazine Articles
- Patents, Permits, and Licenses
- Legal Documents
- Copies of Leases and Other Contracts
- List of Business Consultants (Including Attorney and Accountant)
Not only does the creation of a business plan appendix limit the number of people who might unnecessarily view sensitive information regarding your company’s operations, but it condenses the amount of information that you need to include in the other sections of your plan. Leases, patents, permits, licenses, etc., are all extremely lengthy documents, and more often than not, no one actually wants to read them, they just want to confirm that the documents exist.
The documents included in your business plan appendix that people do want to read, such as reference letters, managers’ resumes, or market studies, will typically only be of interest to the people reading your business plan who want to make sure you have all your ducks in a row before they agree to lend you money. We all know that in business, time is money, so cut right to the chase by putting all the highlights in your business plan, and grouping all your supplementary documents in an appendix.
Lastly, make sure that you control the distribution of any copies of your business plan in circulation. Keep a record of how many copies are distributed, and to whom they’re given. This way, if you need to make updates or other changes, you know where all the copies are so that there aren’t any inconsistencies or different versions traveling about. If you’re planning to use your business plan to raise capital for your company, be sure to include a private placement disclaimer in your appendix, too!
If you have any questions about creating a business plan, give the tax professionals at JRH & Associates a call at (516) 794-5752!