December 08, 2014 Starting and Managing a Small Business

By now, we hope you’ve read through our series on How to Write a Business Plan, and have reached this final installment, which is what to include in the Appendix. Think of your business plan as the narrative that tells the story, while the appendix is where you put the factual information that supports it. The appendix fleshes things out with details that help corroborate and support the plan you have presented.

Maybe you’re wondering why, if each of the preceding sections is covered so thoroughly, you even need an appendix. Why wouldn’t you just include all the information in the appropriate section? The appendix makes the rest of the plan easier to read, without taking a detour for credentials and corroboration.

In addition, your business plan can serve several different functions, and each require a different set of documentation. Your plan can serve as a roadmap for your internal planning purposes only, it can be a recruitment tool for employees or investors, or it can support a request for funding from a financial institution. Each of these would require different documentation, and in many cases, you might not want to share some of the information with everyone. Having an appendix allows you to insert and remove items depending on who will be reading your plan.

What Goes Into Business Plan Appendix?

Again, not everything might need to be shown to everyone who reads your plan, but here is a full list of items you might want to prepare for your appendix:

  • Credit histories for both the business and its owners
  • Business and personal tax returns
  • Resumes of the owners and key management
  • Photos of your products or their prototypes
  • Samples of marketing materials, logos, and mockup ads
  • Reference letters from business associates and community leaders
  • Details of your market research studies
  • Information about your competitors
  • Press clippings about you and the business
  • Any relevant news articles on your product or industry
  • Legal documents such as your incorporation papers, shareholder certificates, etc.
  • Copies of patents, permits or licenses you hold
  • Copies of your property and equipment leases or rental agreements
  • Contact info for your professional staff, including your accountant and attorney
  • Contracts for current or future work
  • Spreadsheets and documentation for financial projections

 

The appendix will be the final section of your business plan, and just as with every other part, take the time to meticulously prepare these supporting materials, especially if you’re presenting the information to a potential lender or investor. The care and thoroughness you put into your backup documents will be a big clue to your readers about your general approach to business, and could help sway opinion one way or the other.

The Small Business Administration suggests keeping a record of who has copies of your plan and what items you’ve included in the appendix. That way, you can update items as necessary. Do keep tight control over who you distribute it to. You may want to consider having your readers sign a Non-Disclosure Agreement, or NDA, to help protect the confidentiality of your information. SCORE, the Service Corps of Retired Executives, has a free template on its website.

And again, because of the highly privileged nature of some of what you’re providing, be very particular who you share what with. Creditors will likely need to have access to all of your documentation, but more casual readers, who might just want a bit of information about your business, don’t need to see the appendix at all, or at most, just a few select items.

How to Organize a Business Plan Appendix

Because the documents substantiate the information presented in your business plan, it’s best to keep them in the same order as they are referred to in the plan. If you have more than a few pages of documentation in the appendix, start with a table of contents page that lists each section of the business plan, broken up with letters or Roman numerals; then list each item you’ve included in the appendix for that particular section.

This will make it easier to refer to the items as you need to in the plan. For example, when you talk about your planned advertising campaign in the Sales and Marketing section, you can refer to “Appendix, Section IV” for copies of what the ads may look like.

If the appendix contains a lot of material, you can also consider using tabs to break it up, which will make it even easier to locate things. Have each document clearly labeled so readers will know exactly what they’re looking at when they refer to them, and make sure your copies are high quality, clear and legible. Do not include original documents.

Business Plan Recap

Don’t rush through the work of putting your business plan together. Whether it’s for your own use or a lender has asked for it, the information it contains, and the work you do to put it together, will be extremely valuable to the success of your company. It does take a lot of time and effort to research and write a solid plan, but it will come back to you in spades.

A business plan follows a specific format, so follow the guidelines we’ve set out for you in the following links, starting with the introductory overview:

Business Plans 101

Section 1  Business Plan  Executive Summary

Section 2  Business Plan  Company Description

Section 3  Business Plan  Organization and Management

Section 4  Business Plan  Products and Services

Section 5  Business Plan  Market Analysis

Section 6  Business Plan  Sales and Marketing

Section 7  Business Plan  Funding Request

Section 8  Business Plan  Financial Plan

Section 9  Business Plan  Appendix

If you’ve already read the series, you’ve heard this before: it’s imperative to always keep your audience in mind. Your goals for what you want the business plan to accomplish will dictate who your audience is, and the information you present will be shaped by that.

Finally, remember the importance of presentation. This is a reflection on you and your business, so make sure it represents you well. Proofread and check for errors in grammar and spelling. Consider hiring a writer or editor if you’re not particularly skilled with words. The business concept is yours, but a professional can help you articulate it in a way you may not be able to.

Use a standard business font for the body copy so that it’s easy to read, and be judicious in your use of italics, underlining and bold. Business News Daily offers links to several free templates you can check out. You can follow one to put your plan together or just look at them for ideas that might work for you. There is also software available that can walk you through the process.

Have the plan printed on good paper and bind it in some fashion, whether into a booklet, in a high-quality binder or spiral binding. Add a cover with the name of your business and make sure to have your contact information easily available. Include a cover letter with the plan, because it may get passed around to other people who aren’t as familiar with your venture.

Remember the old adage, "You only get one chance to make a first impression." Make yours count.

 

Top Articles on Business Planning

Do You Have What it Takes to Start a Small Business?

What is a Marketing Strategy

Understanding the Cost of a Loan

Let's Get Started

In just 15 minutes, you can be on your way toward applying for a small business loan. Start by telling us a little about yourself.