Page 1

The Business Plan: Who is it for and how will it help me obtain funding? By Leon Presser I just read a column in the business section of my local newspaper by a “financial expert” providing advice to entrepreneurs starting a business on why they should create a business plan and what it should contain. The advice provided was typical of what you commonly see on this subject. It was clearly being provided by someone who never started a business and definitely never raised any moneys. This kind of misleading guidance is harmful and tends to lead a new entrepreneur astray. To make my point clear let us consider the basic issues. First, there is no question that if you are planning to start a business you need a well thought out business plan. This is plain common sense and you do not need any guru to tell you so. When you are embarking on any activity you should have a plan. If the activity is a simple one you can create and maintain the plan in your head. However, if the activity is one of any complexity you want to have a written plan that you can review for completeness, improvements and updates, and that serves as a map to carry out the activity. The plan for a new business cannot be kept just in your head, it has too many pieces that interplay with each other, and if any one component changes (as it will) it impacts many other components. So, I believe we all can agree that you need a written plan. The generally recommended sections of a business plan typically include: Executive summary Table of contents Business opportunity Competition Products Marketing plan Key personnel Operations plan Financial projections Now, the key piece of advice that the “professional advisor” gives you as to why you should write the business plan is because you need to present it to venture capitalists and/or angel

investors to have them fund your venture. Then, they tend to elaborate extensively in what is important to these potential investors and how to write your plan to satisfy them. This is misleading advice for two principal reasons: First, ask yourself the following questions: Who is going to be your most important investor? Who is going to be risking everything to make this effort a success? Who is going to stay awake at nights worrying about this business? Who is placing his/her professional career on the line to work on this new business? Who is going to be affecting his/her personal life in a major way? Who is going to be hurt the most if this effort does not succeed?

The Business Plan  

Who is it for and how will it help me obtain funding?

Read more
Read more
Similar to
Popular now
Just for you