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Unfortunately, the vast majority of these plans are usually out of date by the time the printer ink dries. Business moves fast: the product’s features morph, new competitors emerge, or the economic climate shifts. When these changes occur, many people just throw their business plans out the window. Patricia Greene, Professor of Entrepreneurship of Babson College and co-editor of The Development of University-based Entrepreneurship Ecosystem. For many budding businesses, people are the most important asset. And, according to Sahlman, that is first thing many investors look for in a company.
To the external folks, it’s about: can you do this? Value is created when the right people seize the right opportunity and your plan needs to describe both. Feature your most important people prominently in the plan. Starting a business is all about trial and error. Readers of your business plan don’t expect you to have it all figured out, especially at the start of a new venture. Any entrepreneur will tell you that the chances of everything going according to plan are zero. One way to keep your plan dynamic is to include a risk assessment.
Many companies do this on a large scale but it’s important for nascent businesses to do it as well. Sahlman says the plan should demonstrate conditional thinking and lay out how you plan to manage the various risks involved in your venture. Of course, it’s not practical, or even possible, to lay out all of the options. There are times when you need to use a certain format for your plan. For example, a bank or venture capital firm may require you to include specific items and adhere to a certain structure as part of their due diligence. But, fortunately, in most situations, you won’t be bound by a template, and both Sahlman and Greene suggest considering less formal options, such as a Powerpoint presentation or a simple dashboard of indicators that will keep the business on track.