The worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin.Market size, acceptable pricing, customer purchasing behavior, time to commercialization--these all involve assumptions.
The worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin.Tags: Pay It Forward Scholarship EssayWind Energy EssayLeadership Essay TopicsNmsu Admissions EssayEssay On Civil RightsWriting Essays In CollegeFriedrich Nietzsche On The Genealogy Of Morals Second EssayEssay For Corps
Then, if they're interested in learning more about the business, have them sign noncompete and nondisclosure agreements before showing them the entire plan. This is especially common with technology-based startups.
[Be forewarned, however: Many venture capitalists and investors will sign these agreements since they want to minimize their legal fees and have no interest in competing with you in any case.]5. Keep the technical details to a minimum in the main plan--if you want to include them, do so elsewhere, say, in an appendix.
But since there's no shortage of people looking for capital, they don't wonder for long--they just move on to the next plan.
Before you show your plan to a single investor or banker, go through every line of the plan with a fine-tooth comb. If your style is "confident," "crisp," "clean," "authoritative" or "formal," you'll rarely have problems.
A complete plan should also include a discussion of the industry, particularly industry trends, such as if the market is growing or shrinking.
Finally, your plan should include detailed financial projections--monthly cash flow and income statements, as well as annual balance sheets--going out at least three years.4. A business plan is not a novel, a poem or a cryptogram.Since a business plan is more of a marketing tool than anything else, I'd recommend minimizing the discussion of risks in your plan.If you do mention any risks, be sure to emphasize how you'll minimize or mitigate them.Have someone else proofread your plan before you show it to an investor, banker or venture capitalist.Remember that while you'll undoubtedly spend months working on your plan, most investors won't give it more than 10 minutes before they make an initial decision about it.One way to do this is to break your plan into three parts: a two- to three-page executive summary, a 10- to 20-page business plan and an appendix that includes as many pages as needed to make it clear that you know what you're doing.This way, anyone reading the plan can get the amount of detail he or she wants.6.The plan makes unfounded or unrealistic assumptions.By their very nature, business plans are full of assumptions.You don't want to get bogged down by the facts, but you should have some numbers, charts and statistics to back up any assumptions or projections you make.Well-prepared investors will check your numbers against industry data or third party studies--if your numbers don't jibe with their numbers, your plan probably won't get funded.8.