Sometime in middle May you might find me emerging, blinking, uncomfortable from the sunlight, after reading and evaluating 75 or so business plans in a single month. And watching and judging and asking questions about almost as many presentations. I can see the headline:
Man reads 75 business plans in a month … and lives to tell about it.
Does that sound like a complaint? I hope not. Actually; there’s a touch of bragging to it. I couldn’t have spent the last 30 years focused on business planning if I didn’t like reading them (although, perhaps, maybe it would be better without so many all at once).
This is business plan season for me. I just finished reading half a dozen plans for Notre Dame’s annual business plan competition (we, Palo Alto Software, give a prize to the best one), and another half dozen plans for the Rice Alliance business plan competition (I’m a judge, and we have a best business plan prize for that one too). I still have to read five plans for the University of Oregon’s New Venture Competition next weekend (I’m a judge), and I’m supposed to produce a first-cut on 43 plans for the Willamette Angel Conference (I’m one of the angel investors) by the end of the workday today.
Oh, and this is the season I teach my Starting a Business class at the University of Oregon, so I’ll have another 20 or so plans to read as part of the class.
Despite all this, I’m very disappointed that I have to miss the University of Texas’ Moot Corp Competition this year, because of a scheduling conflict. That would have been another half dozen or so plans, also this month.
So don’t tell me, please, that nobody reads business plans. I do. So do the other judges. So does a whole team at Palo Alto Software. And so do all the other members of the angel investor group I’m in.
So you’d like tips, hints, suggestions? If you wrote one of those plans then it’s too late for you to change it now; but maybe I can influence your presentation. And also, maybe if I comment on some of the business plans I’m reading while I’m reading them, it might help somebody else with a plan later on.
All for the greater good, I’m sure.
Maybe I’ll make it a category, like “the business plan marathon,” or something like that. So you can click for related entries. Tim’s folly, perhaps.
And just to kick this off, some points worth noting:
- Profitability too high: I’m not impressed with a plan promising 40%, 50% or more net profit on sales. That doesn’t mean the business is very profitable; it means they’ve underestimated expenses.
- Dense text: Particularly dense scientific text. I’m a business reader, I’m not going to evaluate your science anyhow. I’ll just look at your degrees and past work to see whether that makes your claims credible. Maybe the patents, too, but patents don’t mean much unless they’re good strong patents with a lot of legal work supporting them.
- Missing tables and charts: For example, I want a bar chart to show me the highlights — projected sales, gross margin, and net income, for the first three years, or five years if you insist. I want to see the projected income table in detail, so I can track things like marketing expenses and payroll. I want to see cash flow table. I want to see startup costs, and what the proposed investment is going to buy the venture.
- Treasure hunts: Don’t make me hunt around to find exit strategy, valuation, defensibility, market focus, or any other key point. Make it all easy to find, please.
3 thoughts on “True Story: 75 Business Plans in a Month”
Hi Tim, I greatly enjoy reading your blog. I suscribe to the email edition so I do not always stop by your site,. Howver your list of suggestions compelled me to add something I always like to put in my business plans and that is a risk analysis – identify the risk and likelihood of the risk happening as well as show what steps will be taken to mitigate that risk. Same holds true for opportunity. Realistically – what is the probability of an event. When I work with people on these topics, without fail they are overly opptimistic that opportunities will happen and that risks will not. By charting the likelihood and spelling it out, it present a more realistic picture.
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