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The Business Plan 35

Because of the unlimited range of technologies and market approaches that a start-up can employ in creating a market and a company, there are no hard-and-fast rules governing the size, creation, and contents of a business plan. Experience shows, however, that short plans (ten to thirty-five pages) are better than long plans. Short plans are easier for potential investors to read and comprehend, since significant points are made quickly and succinctly and can be readily understood within the context of the overall plan. Furthermore, because it is quite difficult to create a good short plan, the process of doing so forces the entrepreneur and his or her team to think in an organized way. Entrepreneurs who are unable to make a case for their proposed new venture within a handful of pages need to do more homework. Finally, unless a plan is short, it cannot be easily referenced and updated as a working document.

The business plans written by Bill Poduska-a founder of Prime, Apollo, Stellar, and Stardent-have all been short and successful. In 1983, he offered the following format for a successful business plan containing no more than ten pages:

In many ways, the ability of a CEO and his or her top-level group to write a good business plan is the first test of their ability to function as a team and to run their proposed company successfully. If a firm's founding CEO can't understand, build, and operate the financial model for the company's business, he or she should not be the CEO. If the team has trouble writing a simple business plan, which is the first step in running a business, then it's quite likely they won't be able to make any plans, and they should give up the idea of starting a company until they get their act together (which may mean forming a different team).

Despite the importance of a good business plan, a few companies have managed to become successful without the benefit of such a plan. For example, Gateway

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