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When a Business Plan Fails

Not sure why your plan isn't getting you anywhere? Check out what you should and shouldn't do.
December 18, 2004
URL: http://www.entrepreneur.com/article/32580

Q: I created my own business plan and presented it to my friends and target markets for their review. They loved my concept. Last month, I sent out my finalized business plan to 35 well-known incubators. I've heard nothing from them. Help!

A: There are thousands of reasons plans are rejected and far fewer reasons why they're funded. The media proclaims record levels of capital, but most available money goes to "seasoned" entrepreneurs with a track record. For Internet ideas, an ex-Yahoo! executive can raise money easily. A smart person with no Internet background will have trouble. But avoiding the following common problems can help your plan survive first contact:

How does the incubator make money? What does that imply they need in a portfolio company? An incubator that takes equity and holds it until IPO or acquisition will want companies with the potential to go public or be acquired. That means a big market size and a fairly early harvest. Since their holding period will be even longer than later investors' holding period, they may need a larger percentage of the company to get a decent return.


Stever Robbins is a consultant specializing in mastering overwhelm, power and influence. The author ofIt Takes a Lot More Than Attitude...to Lead a Stellar Organization, he has been a team member or co-founder of nine startups, an advisor and angel investor, and co-developer of Harvard's MBA program. You can find his other articles and information at SteverRobbins.com.

This article originally appeared on Entrepreneur.com in 2002.