Are business plans of any use?

Everyone, from high flying venture capitalist to your neighborhood banker, wants a startup to present them a business plan. In most instances the need to create a business plan doesn’t prove that the business is feasable, but it does prove to a good exercise in crystalizing the core ideas that drive a young company. David Cowan, a partner a Bessemer Ventures, has an interesting post on how NOT to write a business plan.

Cowan suggest building a very strong, but brief, deck of slides that present key elements of execution including team details, where your funding is going, what the sales strategy looks like and explaining the problem your business is trying to address.

Most of the plans that I have seen over the years do a very poor job on the last point. It seems like everyone has got a whiz-bang idea, but taking the idea and applying it to a real-world pain point is not as easy as most people figure.

Cowan’s blog entry is pretty good in getting to the point, and is worth a look.

One thought on “Are business plans of any use?

  1. In my experience there is always a great divide between those who have or own the ideas, and those who are able to clearly communicate to potential investors. Many good ideas continue to sit dormant because the originators were unable to make a coherent business case to those able to provide funding – meanwhile some silly ideas that are well-connected and well-pitched, end up destroying capital funding… it’s a shame, but a regular part of our system.

    Several publicly funded agencies exist with the mission to provide help to potential entrepreneurs – but all too often these “helpers” merely help themselves to perpetuate their cushy government jobs with little regard for entrepreneur’s success … I wonder if these government agency economic development assistors were put on a commission system if their entrepreneurial customers would be more successful?

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