“A strong business plan is essentially the cornerstone of your business and yet many entrepreneurs drag their feet when it comes to writing one – possibly because it involves a good deal of work and may bring back childhood memories of writing a tedious book report on summer vacation,” according to Coleen DeBaise from her upcoming book “The Wall Street Journal Complete Small Business Guidebook”.  She goes on to state her reasons why:

It forces you to identify your (and your company’s) strengths and weaknesses.

It helps you figure out how much money you’ll need.

It gives you clear direction, which can help eliminate stress.

It will serve as a resume when you seek lenders, investors or partners.

It makes you evaluate the market for your product or service and size up the competition.

These are all solid reasons to create a plan yet is there something missing?  The term business plan has become rather cliché but what about the notion of what it takes to write a successful plan.

In my reading I came across a helpful article by John W. Mullins in the WSJ entitled “Why Business Plans Don’t Deliver”.  Mullins discusses his “Five oh-so-common varieties of plans that go quickly into the trash without further consideration.”  Not only does he identify these five types but he emphasizes “the three key elements that go into a successful business plan: a logical statement of problem and its solution; a battery of cold, hard evidence; and candor about the risks, gaps and other assumptions that might be proved wrong.”

Mullins’ five problematic types of plans are summarized below:

Here I am, never mind the problem

“In this kind of plan the writer is smitten with the elegance of his or her technology.  The plan begins not with the identification of a customer problem to solve but with a detailed explanation how the technology works…”

A Coke for every kid in China

“The gambit rests its case on a plethora of secondary data to show how large and fast-growing a market is.”  “….with the large number of customers in our market, we’ll easily get enough.”  Sadly it is never quite that simple.

Just look at our (paper) profits

Often referred to as ‘dream sheets’ one can easily Excel just about anything to a successful conclusion.  While at times difficult to spot, those with a critical eye can certainly ask the tough, poigniant questions that can quickly turn a projected profit into something far less desirable.

Our team walks on water

Pedigree is nice but does the team have the hands-on experience to take on your plan’s challenges.  “A business plan that identifies its critical success factors and shows how the team’s expertise and experience are suited to addressing is much more likely to attract capital-or at least a second look.”

Everything is wonderful

“The most common type of business plan and the one that goes most quickly into the trash, is the one in which the writer can’t find anything but good things to say about the opportunity and plans to pursue it. Rather than attempt to paper over the rough spots and uncertainty, identify them yourself and deal with them candidly in your plan.”

What do you think makes someone want to read your business plan?  Is your plan guilty of some of the 5 items noted above?