The primary goal of any business plan is to present a concise overview of your business idea. Although you may find it helpful to include every detail in your plan, this would hinder communications and make it more difficult for your reader to grasp your business concept. Too much information can be distracting and exhausting.
The Business Plan Appendix
To allow business owners to share imperative information, the writer should make reference throughout the body of the plan to supporting documentation housed elsewhere in the plan. Where should the business owner place this important information, such as marketing materials, résumés, apersonal financial statements?
The section of the business plan that holds this information is the overflow section, often referred to as the appendix. It includes supplemental information that supports the main sections of your business plan.
You present the information in this section in the order mentioned in your business plan. As you write your plan, refer to the document by number or letter, such as Appendix, Item 1; or Appendix, Item B.
For example, if you are discussing your management team, do not share the details of your marketing manager’s background in the body of the business plan. Instead, simply refer to the manager’s résumé in the appendix. The information is still contained in the plan, but it does not interfere with its reading.
Don’t include information in this section that you haven’t referenced elsewhere in your plan, however. The appendix isn’t a filler section. It’s a supporting section, containing useful and important information imperative to your business idea and necessary in supplementing previously provided information.
There is no limit to what you may include in this section. However, if your supporting document or appendix section is large, consider adding a content list at the beginning to help the reader to locate quickly the document in question.
Components of a Thorough Appendix
Here are some examples of what may be found in this section:
- Tax returns of principals for the last three years, if the plan is for new business
- A personal financial statement, which should include life insurance and endowment policies, if applicable
- A copy of the proposed lease or purchase agreement for building space — or zoning information for in-home businesses — with layouts, maps, and blueprints
- A copy of licenses and other legal documents including partnership, association, or shareholders’ agreements and copyrights, trademarks, and patents applications
- A copy of résumés of all principals in a consistent format, if possible
- Copies of letters of intent from suppliers, contracts, orders, and miscellaneous letters of intent
- In the case of a franchised business, a copy of the franchise contract and all supporting documents provided by the franchisor
- Newspaper clippings that support the business or the owner, including something about you, your achievements, business idea, or region
- Promotional literature for your company or your competitors
- Product brochures of your company or competitors, or photographs of your product
- Market research to support the marketing section of the plan
- Trade and industry publications when they support your intentions
- Quotations or pro-forma invoices for capital items to be purchased, including a list of fixed assets, company vehicles, and proposed renovations
- All insurance policies in place, both business and personal
You are not obligated to work each of these items into your business plan. Not all plans require this detailed a level of documentation. Consider this list a starting point for items and details that you may want to include in your business plan.
Once again, the appendix serves a supporting role. It does not introduce new materials, and it does not serve as a filler section. It further communicates your business idea in a professional manner.
Carol Parenzan Smalley is an educator, innovator, and entrepreneur. She is the creator of and instructor for “Creating a Successful Business Plan,” an online course offered by colleges and universities around the world.