In short
How to draft a “superior” business plan that convinces investors, emphasizing four factors over flashy charts and long financial projections.
Guest
William Solman, Harvard Business School professor (argues experienced investors prioritize reality over wishful thinking).
Key claims
Investors mainly want evidence about people (founders plus outside parties like lawyers, accountants, suppliers), the opportunity (what you sell, to whom, pricing, and explicit competition), context (regulatory environment, interest rates, and how you’ll adapt to change), and risk/reward (scenarios like a founder leaving or demand surging, and team responses).
Notable examples
A plan claiming an “unbeatable market position” sounds naive; numbers should support a business model (profit timing, investor payoff) rather than dominate the document.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOKey Elements of a Successful Business Plan
0:30 to 3:18
Discover the four critical factors that investors look for in a business plan.
“With SUVs made to move with your rhythm.”
Transcript
Automatic transcript. May contain errors.0:28This episode is brought to you by Google Chrome. of America for a reason. With SUVs made to move with your rhythm. The versatile Equinox tackles your entire day. The spacious Traverse fits your crew and your whole weekend. And tracks bring style with value you can count on. All infused with tech that has your back. So your drive always hits the right chord. Chevrolet. Together let's drive. You might think that the only thing standing between a would-be entrepreneur and spectacular success is a glossy business plan with five color charts detailed spreadsheets and a decade of month-by-month financial projections but experienced investors know that these are mostly based on wishful thinking not reality what do they really want to see harvard business school professor william solman argues there are four factors critical to the success of every new venture and every great business plan first First introduce the people starting and running the venture, as well as outside parties such as its lawyers, accountants and suppliers.
1:30Most savvy investors will focus their attention on people because they believe that execution skills are what matters most. You need to prove you have the skills, experience and network necessary for success. Next the opportunity is a profile of the business itself, what you're going to sell, to whom, for how much and so on. Be sure to talk about the competition. If your business plan describes an unbeatable market position, you'll sound naive. A good business plan openly discusses strengths and vulnerabilities. Third is context. Here you need to show not only your understanding of the big picture, the regulatory environment, interest rates and so on, but how you will respond when these external factors inevitably change.
2:12Finally, talk about risk and reward. What happens if one of the founders leaves? What happens if demand skyrockets? Assess everything that can go wrong and right and explain how your team will actually respond. But wait, you might be wondering, what about the numbers? Yes business plans should include some numbers but those numbers should appear mainly in the form of a business model that shows your team has thought through key components of the venture success or failure. When will the business begin to make a profit? How will investors eventually get money when the business succeeds? A business plan that asks and answers the right questions is a powerful tool.
2:49A better deal and a better shot at success awaits entrepreneurs who use it.
3:18Cata oil and simple, delicious ingredients. Chosen Foods.
From the publisher
The Explainer: Writing Great Business Plans
25 Jun 2019
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A business plan that asks — and answers — the right questions is a powerful tool.
What’s wrong with most business plans? The answer is relatively straightforward. Most waste too much ink on numbers and devote too little to the information that really matters to intelligent investors.
If you want to speak the language of investors — and also make sure you have asked yourself the right questions before setting out on the most daunting journey of a businessperson’s career — assess the four interdependent factors critical to every new venture: the people; the opportunity; the context; and the risk and reward.
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