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Tell Them Who You Are

An effective business plan includes a clear idea of what your company is and does. You should have decided the type of business entity you're going to use. Is it a corporation, partnership, or sole proprietorship? State in your plan what business you're in. Are you going to be a retailer, distributor, or manufacturer?

You also should include a detailed description of the product(s) or service(s) you'll offer. Here's where your unique selling position comes in. Your USP is your identity in the marketplace. It tells the reader of your plan in a concise manner who you are and what you do. You also should explain and support why your business idea will work.

Macintosh evangelist Guy Kawasaki once said that the best business to start is one that eases a pain. If you can find a market in pain—and cure it—you'll have a successful business. Be sure that you clearly state in your plan who's pain you'll be curing—that is, what market problem you're solving, and how you're going to solve it.

Finally, how will customers obtain your product(s) or service(s)? Will they buy online, over the phone, via fax, through the mail—a combination of all of these methods? What's your pricing strategy? Will you be the lowest, or add value and charge more?

And what about your competition? How you differ from them also should be included in your plan. And after your competition learns of your new business, how do you plan to stay ahead of them?

The answers to these questions will help you not only raise capital but focus on your business and prepare it for what comes next.

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