As many B-School grads learned early on, the business plan is the blueprint and road map to success. Moreover, it is the sum of information that will likely determine the type of entity to be formed, security to be issued, the type and form of operational governance, provisions between and among founders, and much, much more.
Harvard Business School Professor William A. Sahlman suggests a business plan based on four interdependent factors:
1) The people who are involved, from the founders to investors to important vendors/suppliers, and professional service providers such as the accountant and lawyer.
2) The Opportunity the business seeks to seize, including what it seeks to sell, to whom, growth potential and momentum, its economics and hurdles.
3) The context in which the business will operate, including regulatory environment, interest rates, inflation, trends of market, trends of demographics – things that change and uncontrolled.
4) The risk and reward for the venture, based on what can go right or wrong, and the ability for the business team to respond.