What should I send investors?
At what level of sales does the business begin to make a profit? And even more important. When does cash flow turn positive? Without a doubt, these questions deserve a few pages in any business plan.
The men and women starting sahlman great business plan running the venture, as well as the outside parties providing key services or important resources for it, such as its lawyers, accountants, and suppliers. A profile of the business itself- what it will sell and to whom, whether the business can grow and how fast, what its economics are, who and what stand in the way of success.
The big picture — the regulatory environment, interest rates, demographic trends, inflation, and the like — basically, factors that inevitably change but cannot be controlled by the entrepreneur.
An assessment of everything that can go wrong and right, and a discussion of how the entrepreneurial team can respond. They have an experienced, energetic managerial team from the top to the bottom. Ideally, they will have worked successfully together in the past.
The opportunity has an attractive, sustainable business model; it is possible to create a competitive edge and defend it. Many options exist for expanding the scale and scope of the business, and these options are unique to the enterprise and its team.
Value can be extracted from the business in a number of ways either through a positive harvest event-a sale-or by scaling down or liquidating.
The context is favorable with respect to both the regulatory and the macro- economic environments. Risk is understood, and the team has considered ways to mitigate the impact of difficult events. Whom do they know? Is the industry now, or can it become, structurally attractive?
The business plan needs to spell out how close to that ideal the new venture is expected to come. It shows investors the range of possible returns and the likelihood of achieving them. At one level is the macroeconomic environment, including the level of economic activity, inflation, exchange rates, and interest rates.
At another level are the wide range of government rules and regulations that affect the opportunity and how resources are marshaled to exploit it. Examples extend from tax policy to the rules about raising capital for a private or public company.
And at yet another level are factors like technology that define the limits of what a business or its competitors can accomplish. But the best business plans go beyond that; they are like movies of the future. They show the people, the opportunity, and the context from multiple angles.
They offer a plausible, coherent story of what lies ahead. They unfold possibilities of action and reaction. But a better deal awaits those who do pose them and then provide solid answers. Try to find an investor who is actually experienced and knows how to help.Find great deals for Harvard Business Review Classics: How to Write a Great Business Plan by William A.
Sahlman (, Paperback). Shop with confidence on . How to Write a Great Business Plan (Harvard Business Review Classics) In "How to Write a Great Business Plan," William A.
Sahlman shows how to avoid this all-too-common mistake by ensuring. How To Write A Great Business Plan1 By Valerie S. Koenig Business Plans Hawaii 1. With Apologies to William a. Sahlman, Harvard Business Review. Sahlman, William A.
(find version!) How to Write a Great Business Plan 98 “Don’t misunderstand me: business plans should include some numbers. But those numbers should appear mainly in the form of a business model that shows the entrepreneurial team has thought through the key drivers of the venture’s success or .
Harvard Business School professor William A. Sahlman's article on how to write a great business plan is a Harvard Business Review classic, and has just been reissued in book form.
We asked Sahlman what he would change if he wrote the article, now a decade old, today. Key concepts include: A business. Jan 25, · A great business plan is not easy to compose, Sahlman acknowledges, largely because most entrepreneurs are wild-eyed optimists. But one that asks the right questions is a powerful tool.
A better deal, not to mention a better shot at success, awaits entrepreneurs who use it.