![]() As every seasoned investor knows, financial projections for a new company-especially detailed, month- by- month projections that stretch out for more than a year-are an act of imagination. Most waste too much ink on numbers and devote too little to the information that really matters to intelligent investors. What’s wrong with most business plans? The answer is relatively straightforward. And sometimes, in fact, the more elaborately crafted the document, the more likely the venture is to, well, flop, for lack of a more euphemistic word. In my experience with hundreds of entrepreneurial startups, business plans rank no higher than 2-on a scale from 1 to 1. Indeed, judging by all the hoopla surrounding business plans, you would think that the only things standing between a would- be entrepreneur and spectacular success are glossy five- color charts, a bundle of meticulous- looking spreadsheets, and a decade of month- by- month financial projections. Both graduate and undergraduate schools devote entire courses to the subject. A growing number of annual business- plan contests are springing up across the United States and, increasingly, in other countries. Countless books and articles in the popular press dissect the topic. Few areas of business attract as much attention as new ventures, and few aspects of new- venture creation attract as much attention as the business plan.
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