Business plans: What not to do

A Wall Street Journal story is making the rounds on Twitter and Delicious today — and probably a few other news-sharing sites, too.

It’s headlined: “Why Business Plans Don’t Deliver: The five most common flaws and how to fix them.”

The story makes some insightful points, and it’s well timed. The recession, while difficult for established businesses to navigate, has posed unusual opportunities for new ones, providing funding issues don’t get in the way.

Watch this WSJ interview on successfully pitching a plan, or read the story here.

In a nutshell, the story makes these key points:

Don’t get carried away with how great your idea is. Your plan should demonstrate how your idea will meet a need in the market.

Don’t assume your product will tap into a large market just because it’s there. You should test the market and demonstrate how you’ll thrive.

Don’t rely on spreadsheet profit projections alone. You need to plan for the variables.

Don’t promise that your team walks on water. If you admit a weakness, an investor just might step up to help fill that void.

It’s not all rainbows and sunshine, so don’t try to convince investors that it is. Be candid about difficulties and unknowns, and have a plan in place.