This is a summary I have written for Sahlman’s article “How to Write a Great Business Plan”, originally as part of my Harvard Innovation and Business Transformation class assignment.

Business plans are not a good predictor of a venture’s ultimate success. There are many unknown factors that influence revenue and profit, making financial projection beyond a year irrelevant. Unjustified optimism also adds to the inaccuracy, so projection numbers should appear in the form of business model and be used to demonstrate the drivers of the venture’s success and failure. Investors systematically look for the following in new businesses: Competent, experienced people who can execute, attractive business model with a large/growing market, favorable context and possible positive intervention, and finally, manageable risks. Sophisticated, experienced investors are more likely to help a company to solve its problems. Acquiring enough capital is essential, and should be treated as a dynamic process that consist of a series of experiments to assist decision making.


Comments

1 Comment so far

  1. Business Forum on July 11, 2009 5:04 am

    Good one! I have to write a biz plan for my new start up, this is sure helping me

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