People usually ask how many charts or graphs should be put in business plans. It really depends. There are key factors that determine the number of charts and graphs needed in every business plan.
To start, the essential point to think about in creating your business plan is the time constraints of your target audience. If he or she is a retired angel investor, he might have other duties but could spend an hour reviewing your business plan. The more probable situation is a venture capitalist, loan officer or corporate buyer reviewing your business plan on his or her desk topped with numerous other business plans. Therefore, it is crucial that your business plan conveys the important key points easily and quickly. This is where charts or graphs come into picture.
In deciding whether to use a chart or graph, think about the old saying, “a picture is worth a thousand words” The purpose here is that the image should save a thousand words. In other words, the chart or graph must supplement the text; it should not be discussed in the text, or that defeats its purpose. Likewise, the chart or graph should be relevant and should support the text rather than veer away from it.
Apart from respecting the time restraints of the targeted audience in the business plan, there must also be respect given to the audience’s level of energy. In other words, after reviewing several business plans, the investor will most probably skip pages with 400 or more words of straight text. Even though no charts would be applicable to supplement the page, business plan consultants highly suggest using the appropriate spacing and callout boxes to make pages more readable.
Certainly, operational designs and technical drawings must be visually and adequately presented in business plans. Without them, enormous volumes of text are usually needed to describe relatively simple procedures. Significantly, once the text references the graphs, the graphs should be readily accessible. In other words, the graph should be on the exact same page as the text, instead of forcing the reader to turn to the appendix. If the graph is referenced on multiple pages, every page must demonstrate the piece of the graph that reflects the text, together with the entire graph appearing just once in the business plan.
Lastly, when the business plan is being reported to one or more investors, then the number of charts and graphs should reflect the needs, wants and sophistication of the few readers. As an example, if the readers are strategic investors, who know and understand the industry, the business plan should be presented with more charts to convey the message which these strategic investors have knowledge on.
Always remember that the business plan is not a PowerPoint presentation. Too many charts and graphs may give the impression that the business is too lazy to finish formulating a formal business plan.
In summary, the number of graphs and charts used in business plans should reflect important points of the business plan for an audience that is usually energy and time constrained. The graphs and charts must supplement the text and allow the audience to easily and readily digest the data, and influence the audience in progressing to the next step (e.g., scheduling a personal meeting) in the investment process.