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If you're thinking of starting your own business — or if you have a new idea that you want to convince your company to sell, build, or promote — this book will provide you with all the information you need. Based on the expert approaches of the MIT Enterprise Forum, a nationwide clinic providing assistance to emerging growth companies, Business Plans That Win $$$ shows you how to write a business plan that sells you and your ideas. Enterprise Forum cofounder Stanley Rich and Inc. magazine editor David Gumpert use examples real business plans to answer the entrepreneur's most pressing questions about how to effectively present any product or service to potential investors to win their attention and financial support.
"I am recommending it to my students and others interested in getting started in business."--Howard Stevenson, Harvard Business School
The business plan is the ticket of admission to the investment process. Without a plan, furnished in advance, many investor groups won't even grant an interview. And the plan must be outstanding if it is to win investment funds.
Entrepreneurs can be easily tempted to overlook this fundamental truth by the seemingly arbitrary nature of the investment process. According to Richard Charpie, managing general partner of Paine Webber Ventures, a major venture capital firm associated with Paine Webber, "We read 500 to 750 business plans a year — and we invest in six . And the 500 to 750 that we read are only a fraction of those that are submitted." On this basis, obtaining investment funds seems a little like winning in a state lottery.
Assuming the worst, a frequent conclusion among potential entrepreneurs and others is: "We have less than one chance in a hundred to get money, so let's not knock ourselves out preparing a knockout of a business plan. They won't see us or talk to us without first seeing a business plan, so let's sling one together and get a foot in the door. After that, we'll convince them to make the investment we're looking for."
The usual result: no foot in the door, no interest in any further discussions, and no investment. Worse yet, a second try with a better business plan is received with skepticism and built-in reservations.
The lesson: The business plan must be the best that can be written and packaged. The first shot is the most important.Therefore, the plan should read easily, it should be packaged appropriately, it should focus on the key issues, and it should do all the other things that make for an exciting document.
The business plan is truly the only real "foot in the door." It is the company's representative residing at the potential investor's premises. It speaks for the company, and it must speak appropriately and successfully.
In this introductory chapter, we consider the essential elements of a winning business plan, situations requiring business plans, the investor and lender perspectives, and the key criteria financiers use to begin evaluating plans.
We believe that every company needs a written business plan to guide its operations and ensure its viability and growth. The business that runs "by the seat of its pants" often winds up with torn pants. Day-to-day operations are subject to short-term ups and downs, and seemingly important side issues can consume resources and distract managers from their main line of activity and concentration.
A good business plan can keep a company's executives and key employees focused on major objectives. Most well-run corporations operate in accordance with a business plan that defines their goals and establishes the strategy and tactics for achieving objectives.
Thus, we believe managers should get into the habit of preparing business plans to cover a variety of business situations, as follows:
Startup ventures. New businesses seeking funding must almost always have a business plan, whether they are seeking equity or debt financing. We are also convinced that a written plan will help startups achieve excellence by charting the course to be followed by all parts of the business.
Existing companies seeking additional financing. Regardless of their size, companies requiring expansion capital should assemble a written plan to obtain funding at the most favorable rates. The plan also enables both managers and financiers to judge performance against the plan's projections.
New activities within existing companies. Recently a middle management executive of a large food manufacturer approached a member of the MIT Enterprise Forum's executive committee for assistance. He had conceived of a new product, and his group vice president had responded that, although the idea looked interesting, a full-blown business plan was needed to evaluate the product idea and decide on committing corporate funds. The executive committee member helped the manager write the plan, and the product development was authorized.
Clearly, corporate managers seeking to start new products or services or establish new divisions help their chances — and careers — if they have a convincing business plan. If the food company middle manager just discussed had handed his superior a complete business plan in the first place — instead of an orally described product idea — he would have been recognized immediately as a potential candidate for top management.
Designing and writing business plans that win backing is a skill that should be of vital interest to individuals in various aspects of business, as follows:
Posted May 17, 2000
This book was recommended to me by an executive with 30 years of experience and 8-digit net worth as the 'bible' for starting a business. I have used this book twice during the past 6 years to assemble successful business plans. The lessons in the book are not industry specific or date specific, but rather the wisdom that applies to any business. Some of the insights in the book were later worth a lot of money to my companies. My compliments to the author for not just putting together templates or example plans, but rather teaching the entreprenuer how to think.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.