This series takes concepts learned in an MBA program and adapts them for easy comprehension by scientists without a management background. This is currently the 15th part of the series and the third chapter in an introduction to marketing.
Last month, we started a new chapter in this series, one that discusses the drafting of a business plan. In our first part of that new chapter, we talked a bit about the purpose of such a plan and the people you might be sharing the plan with. We said that because you'll likely be sharing this plan with bankers, venture capitalists, and other businesspeople, it's important to tailor the plan to that group of people. This means tailoring the language and the content. But it also means tailoring the formatting and style. For a traditional scientist, who is used to presenting in the form of a peer-reviewed publication or a formal talk to fellow scientists, this last bit of tailoring may be the most difficult, and it is the subject of this month's "Learnin's."
Style and formatting have a lot to do with how your plan is perceived by nonscientists. Because they don't understand all of the science, a lot of the opinion they form of you, as a competent person whom they may be investing in or partnering up with, will be a result of the way you come off in your business plan. That is why we're discussing formatting and style today, even before we discuss content.
A lot of scientists believe that the content, rather than the style, is most important when conveying a message. This was my case when I was a scientist. Egotistically, I believed that my scientific results could speak for themselves. This is unfortunately not how the majority of the business world operates. One of the most difficult things for scientists to do is learn to communicate their message to the world.
Unfortunately, we've only got time here for a few basic suggestions and guidelines. Many books have been written on effective formatting and style, and this chapter isn't meant to replace them. Instead, it is meant to draw your attention to some of the most common things to think about when drafting your business plan.
Use of Headings
The best suggestion I can think of for making a business plan more readable is to use headings effectively. Headings make your document easier to read, organize, and follow. They make it easier to put the document down if readers need to take a break and resume reading later. Headings and subheadings also make it easier for them to refer to a specific section of the document when they want to go back to read it.
Headings are often divided into two styles: "active" and "passive". A passive heading tells readers what section of the business plan they are reading. Examples of passive headers might include "Introduction," "The Revenue Model," and "Technology Overview." They convey that the document has moved on to another topic, but little else. Active headings, on the other hand, tell the reader a bit about the section itself. Examples of active headings include "The Future of Cardiovascular Health," "A New Scanning Technique Sure to Become Popular," and "Large Market, Few Competitors." The style of heading you choose is really a matter of personal preference: Some readers will prefer active headings, believing they convey more information, but probably just as many readers will think that passive headings appear more professional. Remember that the type of heading you choose will say a lot about what you are trying to emphasize in the plan. And once you've chosen one heading style, try to stick to it throughout the document.
Subheadings add depth, especially to large, complex sections of the document. Don't be afraid to use them, but always remember to use either numbered headings (2.2, 2.3, 3.1, etc.) or different fonts that are easily recognizable as parts of a hierarchy: If a reader can't tell the difference between a subheading and a main heading, the use of subheadings will confuse rather than clarify.
A business plan should be written formally and professionally, but not in an excessively technical manner. Finding the right tone and style for the writing can be difficult, not to mention frustrating. The balance between formality and more active "business writing" can be a difficult one to master; the only thing you can really hope for, again, is consistency. Though your plan may take several weeks to get together, it should read as one document, with a consistent writing style from one section to another.
Try to keep concepts and statements as concise as possible. Write for impact, not necessarily for completeness. If a reader has specific questions about sections of the plan, he or she will not hesitate to ask them.
Length of the Document
Determining the appropriate length for a business plan can also be a tricky thing. Again, it is largely a balance of completeness versus impact. A business plan that is too long will lose its reader in unnecessary details, yet one that's too short will often seem hastily prepared. Writing a good, concise business plan will take a lot more time than writing a good, long one.
The business plan should detail each of the sections we're going to discuss in the next few months, including the concept; the operational plan; the finances; the marketing plan; the technology, science and intellectual property; and the management team. Each section should be written briefly, while having within it as much pertinent material as possible. We'll be discussing the length of the overall document indirectly, as we discuss the length and contents of each of the sections within it in the months to come.
While reviewing plans for a venture capital company, I saw plans that were anywhere from 30 to 80 pages long. Rarely did I see life science business plans that were under 30 pages long, though I'm told the "information technology and dot com" venture capitalists often will fund companies using plans much shorter than 30 pages. Plans longer than 80 pages were rare and, in my opinion, showed too much information.
As part of the "formatting" and "style" parts of your document, you should include several "standard sections" to your business plan. We won't be discussing these sections in detail anywhere else in this series, but they are nevertheless important to the overall document. The "standard sections" I am referring to are the title page, table of contents, table of exhibits, executive summary, and conclusion. I talk about these sections here in the "style" section of our discussion, because they are largely a matter of form rather than substance: Each of these sections simply summarizes what is already written elsewhere in the document. But these sections, especially the executive summary and conclusion, may be the most important parts of a business plan.
In both the executive summary and the conclusion, try to outline the optimistic sections of the rest of the business plan. Make sure you include the amount of money the business is looking for, the size of the potential market for your product, your advance over the competition, and the potential "exits" for anyone putting money into the firm. (If you haven't figured out when and how investors are going to get their money out, don't think they're going to put it in.) No matter what the risks, try to make these sections as optimistic as possible--the executive summary is what is going to get readers to keep reading, and the conclusion will be the last thing they read before moving on to the next plan.
Formatting and style are key to the credibility of your business plan. To determine whether yours are good enough, try this simple test: Get your nonscientific friends to read it. If the comments "looks professional," "sounds like a good investment," and "easy to read" come out, you've been successful at getting your message across. If the friends concentrate on the exhibits or scientific data, chances are, you've got to work on style just a little more before sending the business plan to a potential investor.