Kenneth Blanchard and Spencer Johns

Kenneth Blanchard and Spencer Johnson wrote a popular book about being a one-minute manager—a manager who practices principles that can be applied quickly but produce large results.6 Investors in startup and early-stage companies are, in a sense, one-minute investors. Because they receive many business plans, they cannot read them in any detailed fashion. Tim Smith, an officer of the Capital Southwest Corporation, a Dallas-based venture capital firm, observed, "We receive some 300 or more plans per year but invest only in three or four firms in any given year. Thus, we simply do not have the luxury to analyze each opportunity thoroughly."7
The speed with which business plans are initially reviewed requires that they be designed to communicate effectively and quickly to prospective investors. They must not sacrifice thoroughness, however, or substitute a few snappy phrases for basic factual information. After all, someone will eventually read the plan carefully. To get that careful reading though, the plan must first gain the interest of the investor; and it must be formulated with that purpose in mind. While many factors may stimulate interest, some basic elements of a business plan that tend to attract or repel prospective investors deserve consideration.