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How to Write an Effective Business Plan: The Business Plan Appendix

Business Plan Appendix

This is the last article in my How to Write an Effective Business Plan series

If you haven’t read the other articles in this series, I recommend you do. All the articles develop upon the other. 

Each post guides you through writing a section of your business plan. I was going to write a paid ebook but decided to give the information for free.

It’s comprehensive and may not be free for long. 

In this article, I cover what an appendix is and which ones to include in your business plan. If you want guidance on writing your business plan, follow the series from the beginning.

Or if you just want it done for you, click here.

"Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success."

What is a Business Plan Appendix?

A business plan appendix is extra detail or evidence added to the end of a business plan.

They are usually found in business plans and research papers but are also in books, magazines, and other documents.

An appendix contains supplementary materials such as charts, graphs, maps, pictures and tables.

These are not part of the main body text but are important for bringing context.

A business plan appendix can include financial data which provides extra information.

It can also contain resumes, market research and marketing plans.

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Should a Business Plan Have an Appendix?

Most business plans will need a 3-5 year financial forecast. 

Especially, if the business will to borrow money to launch. 

Most investors will want to see the financial numbers before offering money. 

If the business plan is simple and doesn’t need financial support, you may not need an appendix.

The appendix may not be read but having it shows you are serious about this business. 

Why is the appendix important in a business plan?

Providing a business plan appendix proves to investors that you’ve researched all aspects of the business.

They also make a case for the viability of your future business.

After all, one of the main reasons for writing a business plan is to prove the viability of the business.

A good appendix will answer any questions investors have.

Questions such as:

How did you determine these numbers in the proposed use of funds? 

What experience do you and your team have that will benefit this business? 

How did you identify your target market? 

An appendix is an excellent place to insert graphs and charts that would have cluttered the business plan. 

RELATED ARTICLE: How to Stay Focused on Your Goals as a Small Business Owner 

Which Business Plan Appendices Should I Include?

Appendices are an important part of any business plan. They provide context and answer questions for the reader.

The goal is a document that outlines the business goals and how you plan to achieve them.

Each business plan appendix provides more detail on a particular business plan section.

Ask yourself these questions to help you decide which appendices to include:

What information will make my case stronger?

What information will confirm claims made within the plan?

Where did I get the information from?

Some examples are:

  • financial data and reports
  • product specifications or samples
  • pricing charts
  • customer references
  • market research and analysis
  • organizational structures
  • resumes of key personnel
  • marketing materials
  • vendor contracts
  • licenses and permits

 

Each business plan appendix should be available in hard copy and digital format.

Financial Data and Reports

financial documents
Photo by Markus Spiske on Unsplash

Financial data and reports are an essential part of any business plan.

They are arguably the most important business plan appendix.

Many investors will only look at the financial forecast.

This is where you should put the most effort, especially if you require funding. 

Investors can’t validate the business without financial data and reports.

A comprehensive business plan should include the following financial documents:

  • sales forecast
  • payroll forecast
  • operating expenses
  • capital expenses
  • financing costs
  • cashflow forecast
  • profit and loss forecast
  • balance sheet forecast

Financial Statements offer an overview of a company’s past performance.

They also provide insight into its current financial status.

For new businesses, they provide an educated forecast.

Entrepreneurs and business owners must provide accurate information to prove their success potential.

Additionally, companies must keep their financial statements up-to-date so investors can make informed decisions.

If it’s a new business, you must make projections based on your research.

Product Specifications or Samples

tom crew NUUjVj4YQLA unsplash
Photo by Tom Crew on Unsplash

Product specifications and samples are an essential part of any business plan.

Providing this information to investors helps them understand the business better.

This allows them to make informed decisions about whether to invest their money.

If you plan to sell a product you must include specifications or samples in the appendices.

Some examples of this might be:

  • detailed descriptions of products
  • demonstrating how to use a product
  • physical samples
  • links to websites
  • It’s important to provide as much detail as possible when specifying a product in the appendices of your business plan

 

Include size, colour, materials, performance and price points. This provides potential investors with the facts they need before making a decision.

Pricing Charts

Pricing charts are an integral part of a business plan and should be included in the appendices.

A pricing chart should provide an overview of all costs associated with the business. This can include supplies, labour, overhead expenses, marketing costs, and other related expenses.

This provides lenders with an understanding of how your company will operate.

Pricing charts also enable owners to track current and future spending projections. This allows them to make informed decisions on product launches or expansion plans.

An effective pricing chart for your business plan includes fixed and variable costs.

It also includes any projected increases or decreases in expenditure over time.

Make sure you mark each expense category so readers can compare data points.

Example Pricing Chart for Service Based Business

example price chart

Customer Reviews

customer reviews

Customer reviews are often the forgotten section of an effective business plan.

If you’re starting a business, you may not have these yet.

Yet, if your potential business has been a hobby or side hustle up to this point, you could get these.

Don’t overlook this appendix.

Providing social proof is one of the most important aspects to building a successful business.

Plus, it allows investors to understand how reliable and successful your business already is.

Before you write the customer review appendix, you must ask for customer feedback.

Email or call, outlining the information you are looking for and how they can help.

If you can, set up your business on Google My Business and request reviews using this platform. 

It may also help to offer something in return, such as a discount or gift card.

Once you’ve received at least 3 reviews, craft each response into a clear paragraph that outlines their experience working with your company and its services/products.

Including the customer’s contact information will help investors trust the reviews.

Business Plan template download image

FREE Business Plan Template

Click to download the Classic Google Docs Business Plan Template

Market Research and Analysis

Market research and analysis are essential components of any successful business plan.

Understanding how your target market behaves is paramount to a company’s success.

Businesses risk losing money without this fundamental knowledge.

That’s why entrepreneurs must conduct proper market research before creating a business plan.

There are many factors to consider including:

  • state of the industry
  • customer preferences
  • market demographics
  • competition
  • future trends
  • the 4Ps of marketing

 

You can include the surveys and interviews as appendices to your business plan.

Business Organizational Structures

silhouette of people on a hill
Photo by Jehyun Sung on Unsplash

Business organizational structures are an integral part of creating a successful business plan.

Do not overlook this business plan appendix.

If the investor or reader doesn’t understand this area, they will be tentative to invest.

A clear organizational structure provides a clear division of labour, efficient communication and the ability to track progress.

Businesses can choose from several types of organizational structures depending on their size, industry, and other factors.

The most common type of organization is the hierarchical model.

This consists of levels or sections with specialized roles within each layer.

This model can be adapted to fit any business needs but is often used for large corporations. This is because it allows for easy delegation of tasks and tracking of performance.

Other common models include matrix organizations and networked organizations.

The first assigns team members across departments and through management layers.

Networked organizations rely on collaboration between teams across various departments.

Resumes from Key Personnel

van tay media TFFn3BYLc5s unsplash
Photo by Van Tay Media on Unsplash

The appendices of an effective business plan support the information and projections made.

This section should include resumes from key personnel involved with running the business.

Even if you are the only person involved, a resume is often critical to a lender’s or investor’s confidence in the venture.

The resumes show relevant experience, qualifications, education and skills that will help the business succeed.

When compiling resumes for a business plan, they must be comprehensive yet concise. Only one page per person.

Include a professional-looking photo if desired.

Pertinent industry certifications or awards paint a clear picture of the individual’s experience.

Also, emphasize unique accomplishments that may differentiate them from other potential candidates for similar positions within your organization or industry.

Marketing Materials

marketing materials

Your brand says a lot about your business.

Logos, colours and your website should all be added as appendices if you have them.

Business cards, brochures, packaging, menus and anything related to the business brand can be included.

Include anything that will give the reader a better feel for the business as a whole. 

This shows you are invested in your business and want to make an impact on your customers. 

Vendor contracts

If you already have contracts with vendors and suppliers include these as an appendix.

They show that your business is already a trusted entity.

Contracts add value to the business as they show an intent to purchase.

Most vendors don’t draw up contracts with just any business.

They need to feel like the risk is low and the value is high to get into business with a company.

Licenses and Permits

If your business is in an industry that requires permits or licenses to operate and you have obtained them, include these as appendices. 

Search for regulatory bodies in your area. 

Here’s an example from my province.

This shows investors that you have gone through the processes necessary.

It shows your intent to follow the regulations. 

Having the necessary licenses and permits proves you are willing to invest in your business.

That's All Folks...

Writing a business plan can be a challenging, yet rewarding, experience.

As part of the process, consider including appendices that provide extra information for the reader.

Appendices add professionalism to your business plan.

Appendices create a comprehensive overview of the business.

Leveraging appendices in your business plan is key to demonstrating you have done your research.

They show that you are ready to take on the challenge of starting a new business.

By ensuring all relevant information has a business plan appendix, readers will get the full picture.

They will have confidence in your ability to succeed.

With this knowledge at hand, entrepreneurs now have an even greater opportunity to create a winning business idea and realize their dreams of success!

I’m currently developing a Financial Forecast Spreadsheet and other appendix templates. Join my email list if you want to know when they are available.

That’s it for the ‘How to Write an Effective Business Plan’ Blog Series. I hope you got something out of it!

I hope this article helps you develop each business plan appendix for your new venture.

Did I miss anything?

Is there anything you still want to know?

Comment below!

P.S. Whenever you’re ready, here are 3 ways I can help you.

Online Business Management. I will assess your business and make recommendations for improvements. Together we’ll create a plan to streamline the daily operations. My goal is to simplify your business so you can focus on what’s important.

Business Plan Writing. Take the first step to building your dreams.

Digital Marketing. If your business doesn’t have a digital marketing plan, you’re leaving money on the table.

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