This article, appeared on the Wall Street Journal's website, covers some interesting points that anyone writing a business plan should be aware of.
The article begins by describing three core elements of a good business plan:
- The logical statement of a problem and its solution.
- Hard evidence supporting the previous.
- Candor and awareness about the risks, gaps and other assumptions.
The author continues by describing what he considers the five most significant kinds of rejected business plans:
- "Here I am, nevermind the problem": business plan is technology centric, while underestimating the importance of identifying the problem it solves. Better technoloogy no always wins!
- "A coke for every kid in China": lack of knowledge about the initial market. Ignore the difficult work of crafting a strategy to gain market awareness, persuade customers, ans set up a distribution.
- "Just look at our (paper) profits": financial projections based on wrong or weak assumptions.
- "Our team walks on water": lack of objectiveness in assessing the team's skillset.
- "All is beautiful": the writer of the business plan can find only good things about his idea, not seeing or aknowledging any potential pitfall associated with the idea.
This article provides precious insight for all perspective participants to Mind The Bridge: read carefully!