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It`s trendy to say investors don`t read business plans, but what actually happens is they only read business plans of the businesses they are interested in. They reject businesses from intro and pitch, without reading the business plan.

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Why? Because once you know the details of your business inside and out, you will be better prepared to write your executive summary. After all, this section is a summary of everything else you`re going to write about.

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The most common mistake by far is on profits. Startups that grow don`t produce profits. Investors make money on valuation increases, not profits. Real businesses rarely produce more than single-digit profits. Big profit projections are sophomoric. Take all those profits and dump them into marketing expenses and you`ll be better off.

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There is value in doing an ample amount of preparation prior to creating a business plan: you construct creative solutions to complex problems. Make sure to take the time to do the job properly. Additionally, be sure to keep detailed notes on your sources of information and on the assumptions underlying your financial data.

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In the beginning, one may have the urge to delve straight into specific strategies, such as evaluating production methods, studying market segments, and evaluating the competition—but do not do that, at least not yet.

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Defining the problem you are solving for your customers is by far the most critical element of your business plan and crucial for your business success. If you can`t pinpoint a problem that your potential customers have, then you might not have a viable business concept.

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