standing between a would-be entrepreneur

and spectacular success is a glossy business

plan with five-color charts, detailed spreadsheets,

and a decade of month-by-month financial projections.

But experienced investors know that these are mostly

based on wishful thinking, not reality.

What do they really want to see?

Harvard Business School professor William Sahlman

argues there are four factors critical

to the success of every new venture

and every great business plan.

First, introduce the people starting and running

the venture as well as outside parties,

such as its lawyers, accountants, and suppliers.

Most savvy investors will focus their attention on people

because they believe that execution skills are

what matters most.

You need to prove you have the skills, experience, and network

necessary for success.

Next, the opportunity is a profile of the business itself,

what you're going to sell, to whom, for how much, and so on.

Be sure to talk about the competition.

If your business plan describes an unbeatable market position,

you'll sound naive.

A good business plan openly discuss its strengths

and vulnerabilities.

Third is context.

Here you need to show not only your understanding

of the big picture--

the regulatory environment, interest rates, and so on--

but how you will respond when these external factors

inevitably change.

Finally, talk about risk and reward.

What happens if one of the founders leaves?

What happens if demand skyrockets?

Assess everything that can go wrong and right

and explain how your team will actually respond.

But wait, you might be wondering,

what about the numbers?

Yes, business plans should include some numbers,

but those numbers should appear mainly

in the form of a business model that

shows your team has thought through key components

of the venture's success or failure.

When will the business begin to make a profit?

How will investors eventually get money

when the business succeeds?

A business plan that asks and answers the right questions

is a powerful tool.

A better deal, and a better shot at success

awaits entrepreneurs who use it.