Business Plans Aren't What You Think

From Zanecorpwiki

Most people think--because it's what most people are told--that business plans are to sell your investors. One needs to appear mature and reasonable, so it's not like a glossy sales brochure. You talk about possible problems and try and give an honest assessment of risk, etc. and for friends and family, maybe this is true.

But for the real investors, the business plan is justs fodder. That's why a classic business plan is so big. What the investor wants is for you to give them a whole bunch of rope they can hang you with. This isn't bad, it's just the fact. All those charts, statements, facts, the serious investor scans it, skipping sections they don't like, ticking off the things they can press you on. Not because they know anything you don't, but just to see if you'll trip up.

They need to eliminate deals, and the business plan is you giving them the ammunition to shoot your's down. It's perfectly rational on their part and there's not much you can do about it. If it's too thin, that's a critical stop problem so you can't focus down on the bests areas. Anything they ask for, any new charts or analysis they want, you have to produce. Not because it'll tell them anything or they'll even look at the results, but just because they ask and maybe it'll trip you up.