Careers & Business

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Craft a successful business plan

A great business plan can go a long way toward transforming an idea into a successful business. Though no two businesses are the same, good business plans tend to follow a similar formula. The following are a few tips for would-be business owners looking to draft memorable business plans.

* Don't be too wordy. Potential investors, whether they're venture capitalists, family members or lending institutions, don't want to be handed a manifesto masquerading as a business plan. A good business plan is brief and gets to the point early on, spelling out why the business is worthy of an investment and how it is going to be successful.

* Define what makes your business unique. Your business plan is similar to a sales pitch, one that you will need to turn your idea into a business. A successful sales pitch should define what makes your business unique. Clearly define what separates your business from others and why these differences make you and your business idea a solid investment.

* Resist going overboard. When crafting a business plan to present to potential lenders or investors, business owners may be tempted to offer quantity over quality. But successful startups often begin small, selling a particular idea or item, and then diversify their offerings after establishing a customer base and experiencing a prolonged period of success. Investors and lenders are aware of this and might be turned off by a business plan that makes business owners appear less like an expert and more like a jack-of-all-trades.

* Be specific as to how you will generate revenue. Good business plans clearly indicate how business owners plan to generate revenue. Simply selling products won't be enough to convince savvy investors, who want to see a sales model summarizing how customers will be drawn to a business. It's also beneficial to include estimates as to how many customers will be needed each month to meet your minimum revenue targets.

* Define your market. When defining the market for your business, include its size and the specific people within that market you intend to target.

* Make projections. A strong business plan will include estimates as to how many future customers you hope to attract and the cost of acquiring those customers. Project the cost of your products, not only to sell to customers but to produce those products as well. Projections also include how far an investor's money will go. Investors want to know how far their initial investments figure to go and when you anticipate the need for another infusion of capital. Such information is important, as investors want to know when business owners feel their businesses will become self-sustaining and begin to pay back their investors.