What Is an Appendix in a Business Plan?
Some small-business owners seem to know what they're talking about. It's tempting to ask them to rate their pain on a scale of 1 to 10, as in "Just how painful was it for you to write your business plan?" Chances are, you're not going to like their answers.
Since entrepreneurs are creative thinkers, try upending the paradigm by telling them you've come up with an ingenious way to ease the pain, write a comprehensive business plan and even feel gratified by the insights you've uncovered: Talk your way through the plan and reserve the background information for the appendices.
At first glance, this may not seem to be a revolutionary idea. An appendix is that fun section in the back of a report or book that contains supporting documentation – anything and everything that could derail the flow of the content. Charts, graphs, plats of a survey, financial statements and resumes from your right-hand people are examples of supporting documents in a business plan. They're natural fits for an appendix, which is where readers look for information that amplifies, clarifies, illustrates and otherwise shows them what you mean.
When readers choose to thumb to the appendix in a business plan is a matter of preference that underscores why it may help to think of an appendix as an adjunct to your business plan, capable of standing on its own and, perhaps, preceded by its own table of contents.
Based on your experience with flipping through appendices, you may know there are several ways to consult the contents:
- Read the business plan, and when prompted, flip to the specified page in the back before returning to the business plan.
- Read the business plan from start to finish, ignoring prompts to "see Appendix, page XX" for more information.
- Read the business plan from start to finish and then read the appendix in the same manner.
Of course, you may be unconcerned with how readers peruse your business plan; you just want to get through it. Since you're facing the prospect of a 25- to 100-page project, it may seem less daunting to talk your way through it.
Viewing your business plan as the story of your business makes more than practical sense. It may help prepare you for the marketing outreach efforts that lie in your future. Consumers like to read and share stories, and the story of your business vision is probably one you can tell in a compelling way.
As an entrepreneur, chances are that you're highly verbal and articulate – skills that lend themselves well to either:
- talking and writing your way through the business plan simultaneously.
- forgoing the actual writing to focus on the narrative, recording the story and then having someone else transcribe the tape.
Either way, without having to worry about what to do with all that supporting documentation, you are free to focus on the structure of the business plan, following a the business plan sample format recommended by the U.S. Small Business Administration:
- Part 1: Introduction (including the executive summary)
- Part 2: Market analysis
- Part 3: Company description
- Part 4: Product or service
- Part 5: Management and organization
- Part 6: Sales and marketing strategies
- Part 7: Financial information
- Part 8: Investments and/or funding requests
As you talk (or dictate), you may find easy ways to "bookmark" inclusions for the appendix as you find yourself:
- Stopping to elaborate on the information
- Referring to documents to jog your memory or make a point
- Going off on a tangent, as everyone is prone to do
The chances are good that this is the type of information you should set aside for the appendix to round out your business plan and greatly reduce your personal pain at the same time.