He is aghast that most business plans waste too much ink on numbers and devote too little to the information that really matters to intelligent investors. “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.”

The numbers in the business plans should appear mainly in the form of a business model that shows the entrepreneurial team has thought through the key drivers of the venture’s success or failure, explains Sahlman. “In manufacturing, such a driver might be the yield on a production process; in magazine publishing, the anticipated renewal rate; or in software, the impact of using various distribution channels.”

The author advises those who want to speak the language of investors to ensure they have first asked themselves the right questions; in this regard, he prescribes a framework with four factors, viz. the people, the opportunity, the context, and risk and reward.

“When I receive a business plan, I always read the résumé section first. Not because the people part of the new venture is the most important, but because without the right team, none of the other parts really matters,” writes Sahlman.

Prescribed read for enthusiastic entrepreneurs.

Editing is the hard part, says K. Dennis Chambers in The Entrepreneur’s Guide to Writing Business Plans and Proposals ( www.macmillanindia.com ). “Writing the first draft is like a sculptor pressing together giant slabs of clay…simply getting all of your material together,” he analogises. “When you know you have every critical idea on paper, you can relax and start shaping those ideas into something that others will want to read.”