A plan that might be great at selling the company might be bad at supporting a loan application, or for managing a company. My favorite business plans are about managing: starting and growing a company. Some have a support objective, reassuring a lender about risk, usually with assets. Some of them have sales objectives, selling an idea, and a team, and a market, to investors. But the plan as part of high-end startup looking for VC or angel investment does in fact have to present the business to outsiders. The business plan used internally to manage the company doesn’t have to polish and present the company to outsiders, so it probably lives on a network, not on paper. Those are specialty uses, that apply to some business situations, while almost all businesses ought to develop management-oriented business plans that exist to help run the company, not to be presented to outsiders. Some are supposed to support loan applications. You have to start with whether or not the plan achieved its business purpose. We simply can’t look at business plans as generic. With that in mind, here are some of the qualities of a good business plan, in order of importance: But there it is, a cold hard (although hypothetical) number. You take the money in the bank with the business plan and subtract money in the bank without the business plan, and that’s the value. The actual calculation is pretty hypothetical. Like just about everything else in business, the value is money. As a genuine ex-hippy baby boomer entrepreneur, I like touchy-feely do-gooder measurement systems. That’s hard for me at least, maybe not for you, but for me.
Here’s the hard part, right at the beginning: the value of a business plan is measured in money.
Then I realized that answering these questions is blogworthy. I balked at first, because I think I’ve answered these questions before, on this blog, or on my other blogs, or at or. Yesterday I got an email from an MBA student asking me four questions. This is the first of four answers to interesting questions.
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