Dollinger index

The Business Plan 161

• Context: What does the big picture look like?


• Risk and Reward: What can go right and what can go wrong?
  Sahlman explains that these four elements are critical for investors and for internal
  use. As we saw in Chapters 2, 3 and 4, the dimensions of entrepreneurship include the
  people, the organization, the big picture, and the industry context.^16
  The business plan follows the general format for documents:

1. The first section tells the audience what the entrepreneur is going to tell them. This
   prepares them for what is coming.


2. The major middle sections give the audience the information and arguments that
   are central to the company’s purpose.


3. The last section reminds the audience what it has heard and summarizes the pres-
   entation.
   There are many variations on this, theme,
   17
   but they all include the same essential ele-
   ments.

Preliminary Sections

Outline.

• Cover page


• Table of contents


• Executive summary

1. Type of Business


2. Company summary


3. Management


4. Product/service and competition


5. Funds requested, collateral, use of proceeds*


6. Financial history, financial projections*


7. Deal structure, exit*

*Required if the plan is used for financing.

Estimates indicate that, on average, a reader spends less than ten minutes evaluating the
plan for a new venture.^18 To induce that reader to go on to the main body of the docu-
ment and consider the details, the opening sections must be both attractive and inform-
ative.

Cover Page. The cover page includes the following information:

• Company name, address, telephone and fax numbers, and e-mail address. The read-
  er is more likely to contact the entrepreneur if it’s easy to do so.


• The name and position of the contact person, one of the firm’s top executives, who
  must be fully prepared to answer questions about the plan.


• The date the business was established (e.g., “established 2006”) and the date of this
  version of the business plan (e.g., “February 2007”).


• The full name of the organization from which funding (or credit, or a supplier
  agreement, etc.) is being sought.