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Investors and loan providers need to know that you have a solid understanding of the trajectory of your business. You need to prove that there is an attainable and sustainable need for your solution, that you have a strong business strategy, and that your business can be financially stable.

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And you don`t have to start with the full, detailed business plan that I`m going to describe here. In fact, it can be much easier to start with a simple, one-page business plan—what we call a Lean Plan—and then come back and build a slightly longer, more detailed business plan later.

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Second, your business plan should be a tool you use to run and grow your business. Something you continue to use and refine over time. An excessively long business plan is a huge hassle to revise—you`re almost guaranteed that your plan will be relegated to a desk drawer, never to be seen again.

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At the top of the page, right under your business name, include a one-sentence overview of your business that sums up the essence of what you are doing. This can be a tagline but is often more effective if the sentence describes what your company actually does. This is also known as your value proposition.

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Investors, lenders, and others know that a market without competitors is typically a tiny and uninteresting market. And, of course, a healthy, growing market will always attract competition. So, unless you`re creating a new industry or a new market segment, you will have competitors. And, you`ll need to figure out how to beat them or at least to compete with them.

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The best use of business plans starts with founders using plans to establish strategy, tactics, milestones, and (especially important) essential projections of sales, spending, headcount, startup costs, capital needs; it`s for the founders to know, first, what they plan to do.

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