The Importance of A Business Plan

In every major industry it is extremely important to have an expertly crafted business plan that you can present to potential investors and/or producers. In the film industry, we use business plans to pitch film projects to prospective studios or investors. This plan normally gives a decent amount of information regarding the project that will help tell producers/investors/studios why they should invest or back a particular project.




Harvard has long been a leader in the world of business education, and will always be considered one of the top Ivy-League schools in the world. So, to get some insight into the importance of having a business plan I decided to look into William Sahlman who is a Chair at the school. Along with his high ranking position at Harvard, he is also involved with various investor firms and an advisor to different private investors.

(Video on Business Plans)

Mr.Sahlman has written multiple publications and articles on business plans and his expertise in that field of work. One of his more notable articles is one that he wrote for the Harvard Review titled "How to Write a Great Business Plan." According to his years of experience and the business plans he has put together, he has noted that the most important aspects to a successful business plan are the people, the opportunity, the context, the risk and the reward. Much of this may seem like a lot of common sense, and as he breaks each component down it becomes clear as to why that is, but he also goes on to say something very interesting. Mr.Sahlman writes that the biggest downfall to a business plan is arrogance, mostly due to inexperienced writing.

Another expert in crafting a business plan who I looked into is Philip Schlein who was once CEO of Macy's California. For him, some of the more important aspects of a business plan or pitch are the actual team building the team and the business model. He states that it's important to let investors know what sort of structure your business will have and how their money will be used. More importantly, it's good to let the people who are giving you money know how they are going to get their money back.

In the film industry, these experts shine brighter than ever, because all film producers and investors are worried about where their money is going and how they are getting it back. Everyone who invests in a film is more concerned about their ROI than about the actual film. Also, having a greatly structured crew can make or break a production.

-Michael