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The Essentials of a Business Plan

All business plans must show two things: a winning idea and a clear shot at a profit.

A good business plan has two basic goals: It should describe the fundamentals of your business idea and provide financial data to show that you will make good money. Beyond that, the content of your business plan depends on how you intend to use it.

How Will You Use Your Business Plan?

Depending on whether you're trying to attract investors or are creating a blueprint for your own use, a business plan can take somewhat different forms.

Attracting Investors

If you will use your business plan to borrow money or interest investors, you should carefully design your plan so that it sells your vision to skeptical people. Normally this means your business plan should include:

• a persuasive introduction and request for funds
• a statement of the purpose of your business
• a detailed description of how the business will work (including what your product or service will be, whether you'll have employees, who will supply your goods, and where you will be located)
• an analysis of your market (who your customers are)
• an evaluation of your main competitors
• a description of your marketing strategy (how your business will reach plenty of customers and fend off your competitors)
• a résumé setting forth your business accomplishments, and
• detailed financial information, including your best estimates of start-up costs, revenues and expenses, and your ability to make a profit.

Together, all the parts of your plan should reveal the beauty of your business idea. You want to show potential lenders, investors, or people you want to work with that you've hit upon a product or service that customers really want. In addition, you should prove that you are exactly the right person to make your fine idea a roaring success.