Last Updated Oct 10, 2008 1:56 PM EDT
According to Harvard Business School professor William Sahlman, who wrote a classic work on business plans, it all comes down to one thing: People. Says Sahlman in an interview with yours truly on HBS Working Knowledge:
"When there is great uncertainty in the market, investors become quite risk averse. They will only back proven entrepreneurs with truly compelling ideas. People make the numbers, not conversely. So, I still think the people making the forecasts are more important than the numbers themselves."Some more tips for business plan writers:
Short and Simple. "I have seen compelling business plans in the form of a few PowerPoint slides, a couple of scribbled pages, and a brief video," Sahlman says. "What matters is having all the required ingredients (or a road map for getting them), not the exact form of communication."
Encourage Investment From Customers. The best money comes from potential customers, not venture capitalists.
Tough Times Present Opportunities. Yes, this is a difficult environment for start-ups, but it also likely means you will have fewer competitors competing for resources.
Think Global. "We live in a world of democratized access to ideas, human capital, and mone," Sahlman says. "There are fabulous global ventures being started in every corner of the globe. These ventures can raise money locally or globally. They can disperse talent in many countries."
What do you think are the key ingredients of a business plan? Do you have a favorite format? How do you emphasize the people behind the pitch?