Why A Business Plan

Identify that, and let the rest be supporting characters.

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Phrases like “unparalleled in the industry;” “unique and limited opportunity;” or “superb returns with limited capital investment” – taken from actual documents – are nothing but assertions and hype. Lay out the facts – the problem, your solution, the market size, how you will sell it, and how you will stay ahead of competitors – and lay off the hype.

Many early-stage companies believe that more is better.

To say that you have no competition is one of the fastest ways you can get your plan tossed – investors will conclude that you do not have a full understanding of your market. Investors are very busy and do not have the time to read long business plans.

The “Competition” section of your business plan is your opportunity to showcase your relative strengths against direct competitors, indirect competitors, and substitutes. They also favor entrepreneurs who demonstrate the ability to convey the most important elements of a complex idea with an economy of words.

With so many opportunities, most investors simply focus on finding reasons to say no.

They reason that entrepreneurs who know what they are doing will not make fundamental mistakes. This article shows you how to avoid the most common errors found in business plans.An ideal executive summary is no more than 1-3 pages.An ideal business plan is 20-30 pages (and most investors prefer the lower end of this range).The greater the pain, the more widespread the pain, and the better your product is at alleviating the pain, the greater your market potential.A well written business plan for a startup places the solution firmly in the context of the problem being solved.Your business plan is very often the first impression potential investors get about your venture.But even if you have a great product, team, and customers, it could also be the last impression the investor gets if you make any of these avoidable mistakes.No matter what you may think, you have competitors. A coronary bypass is a substitute for an angioplasty.Maybe not a direct competitor – in the sense of a company offering an identical solution – but at least a substitute. Competitors, simply stated, consist of everybody pursuing the same customer dollars.Although there is no single “correct” business plan structure, one successful structure is as follows: As stated earlier, there is no “right” structure – you will need to experiment to find the one that best suits your business. Your cash flow for the transaction will be negative next month when you pay your suppliers.Although this example may seem trivial, very slight changes in the timing difference between cash receipt and disbursement – just a couple of weeks – can bankrupt your business.


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