180 ENTREPRENEURSHIP
Prewriting. The writers should begin by putting their information and thoughts in an
outline or another organized form to find out what they know and need to know. At
this stage they should also think about the intended audience and arrange the material
to suit the purpose of the plan.Writing and Rewriting/Revising. Ideally every writer should be able to transform an
outline into a fully articulated rough draft and then revise that piece for form, coherence,
and style. Personal computers have made this process much easier. Clear and concise
writing is the goal, but writers can get bogged down in the rewriting and revising part
of the process. The best way to prepare for writing under a deadline is to practice writ-
ing every day.Editing. Editing is the final step, and a number of helpful tools are now available,
including the computer’s spell checker and thesaurus. Some word processing software
includes a grammar checker but be careful of words that sound similar or typographical
errors. The program might not catch these. If time permits, a colleague or friend of the
entrepreneur might read and critique the plan. What matters most is that the plan says
what the entrepreneurs want it to say. Despite the numerous published guides for writ-
ing business plans and the general agreement on content, entrepreneurs continue to sub-
mit poorly written plans.^30 One researcher reviewed 20 business plans submitted to ven-
ture capitalists and found that:^31- 30 percent failed to include a specific business strategy.
- 40 percent of the teams lacked marketing experience, and the marketing sections of
the plan were weakly developed. - 55 percent failed to discuss technical idea protection.
- 75 percent failed to identify the details of the competition.
- 10 percent had no financial projections at all; another 15 percent omitted balance
sheets; and 80 percent failed to provide adequate details of the financial projections.
The more deficiencies in the plan, the lower the odds of gaining support from venture
capitalists.
Some entrepreneurs may be tempted to let someone else write the plan or to rely on
a computer program or template. Writing a business plan is a chore—-like writing a
term paper. But no computer program or professional business plan writer can make
lemonade from a lemon of a business idea. The maxim “garbage in, garbage out”
applies.^32
SUMMARY
Every new venture needs a business plan. The advantages of writing a plan far outweigh
the costs. The purpose of the plan is to enable the top executives of the established firm
or new venture to think about their business in a comprehensive way, to communicate
their objectives to individuals who may have a stake in the firm’s future, to have a basis
for making decisions, and to facilitate the planning process.