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The Essentials Of A Good Business Plan
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The first step to a new business may be getting a new business idea, but the first step to getting seed funding for the new business is by developing an effective business plan.

A good business proposal is a tool that an entrepreneur uses to convince business investors about the attractiveness of the idea and the product. Any new business proposal that hopes to raise capital should describe the fundamentals of the business idea and provide financial data to show that you will make good money.

To attract a business investor, a business plan should include a persuasive introduction and request for funds, statement of the business, detailed description of the nature of the business and its structure, number of employees, structure of the business, analysis of the market, evaluation of main competitors and description of the marketing strategy.

The business plan should highlight to the business investor the beauty and uniqueness of the idea. In addition, it should communicate to potential investors that it has the chance to make it big in the market. It is only after the business plan is developed can an entrepreneur approach an investor for business capital.

Usually the first source of funding for a small business is family and friends as well as private savings. It is only after tapping into these sources does an entrepreneur usually approach a venture capitalist or an Angel Investor.

A Venture capitalist is very similar to an Angel Investor in how they analyze businesses. But the main difference between the two business investors is that most times Venture Capitalists are looking to support a new business only for a few years. By the end of that period, they look to move on to other new business proposals.

Most venture capitalists get their money from various institutional and pension fund investors. Like other investors, venture capitalists also go through a process of raising funds. They do this by raising funds from foundations, endowment funds and retirement funds. To raise capital from venture capitalists and angel investors, the financial projections in the business plan are very important. Therefore, an entrepreneur needs to develop a new business proposal that shows the potential to make profits. However, an over optimistic financial projection is not going to receive any credit either from the business investor.

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