What Is a Dehydrated Business Plan?

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A business plan is a vital document for any company, but especially one looking for financing. A complete business plan, however, takes considerable time to write -- and for potential investors and lenders to read. That's why it's common for firms to produce a stripped-down version that covers just the highlights. This version has been dubbed a "dehydrated" business plan.

Purpose of a Plan

The U.S. Small Business Administration calls a company's business plan the "essential road map for business success." A complete plan describes where a company is now and where it expects to go. It includes detailed and specific information about the company, the products and services it offers (or plans to offer), the marketplace in which it will compete, and how it will distinguish itself in that marketplace. The plan is not a lofty statement of hopes and dreams, but rather a statement of goals and a clear-eyed, data-driven explanation of how to achieve those goals.

The Dehydrated Version

The dehydrated business plan is not a substitute for the full plan. It's just a summary. The purpose is to provide an overview that will capture the interest of the reader. When readers want more information, they can be given the full business plan, which fleshes out the dehydrated version. For example, the dehydrated plan might simply identify the company's target market, while the full plan describes the size and availability of that market and why the company thinks it can reach that market. Or, the dehydrated plan might outline broad marketing strategies, while the full plan goes into specifics about tactics. Full plans may run dozens of pages, while a dehydrated plan may be five to 10 pages. Dehydrated plans are often given to potential investors and lenders to gauge their interest in a venture without swamping them with information.

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