While the information you gained from your college accounting class may be pertinent to running a business, if you can’t read a profit-and-loss statement or analyze a balance sheet you may be in trouble. But it isn’t the whole story. Chances are you’re venturing out into the business world without an understanding of how money and taxes work. Buy a book, take a class or do some online research to figure out how to maximize your profits, invest your income and keep revenues rolling in.
As a serial entrepreneur, investor, and chief architect of “the Super Bowl of investment competitions,” Rob Adams has poured through tens of thousands of business plans over the years—and has seen the good, the bad, and yes, the ugly. “There’s this tendency for smart people to want to say a lot in a short time,” he says. “If you do that, you sound confused, like you don’t know what’s important. Part of a good strategy is knowing what not to do.”
If written effectively, a business plan can serve as the blueprint for a startup’s success. It’s a roadmap that guides founders from A to B, a tool for wooing investors, and a way to keep fast-growing teams focused. Forget the debate about whether you need one or not. (You do.) The more relevant question is what to include and what to leave on the proverbial cutting room floor.
While there’s no magic formula, there are certain elements that all great business plans should have—and those that should be avoided at all costs. In recent years, those on the receiving end of these documents have seen what you might call buzzword creep, empty rhetoric that serves as a distraction from otherwise good ideas.