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As an entrepreneur seeking business finance, it is crucial that investors see you as intelligent, credible and competent. Your business plan can support or deny that you possess the above attributes, depending on several important details within the text. Most entrepreneurs have heard what NOT to write (i.e., "Our competitors do not exist, and our management team is unbeatable"), but the following five tips are excellent examples of what you SHOULD do to gain credibility and be taken seriously by a venture capitalist.

 1. Research your market. Probably the most important element of the business planning process is that it forces you as an entrepreneur to investigate your market. Make sure you speak to potential clients, not just family and friends. You need to find real evidence that people in the market will be willing to part with their cash in order to get hold of your product/service. The information you gain here can be used for the business plan. the financial projections, creating the product or service offering, marketing your business and a whole range of related benefits. So first step when thinking of launching a new business, product or service = Get into your market and find out if there is a need.

 2. Keep it real. When it comes to your financial projections, make sure they are realistic. Do a "sanity check" by looking at your income statement, particularly your year-to-year growth and your profit margins. If something seems "too good to be true," it probably is. Dig through your assumptions and temper them to make sure they're all realistic. Also, keep in mind that not everything will go as planned.

 On the other hand, if you can realistically support that your business will double in size every year, by all means do so. But be prepared for healthy skepticism from investors, and be ready to answer all of their questions in detail. Another common assertion is that a business will have unrealistically strong operating margins. If you can show data from comparable companies that are actually making those margins, then your projections are believable.

3. Examine the barriers to entry. This is an overlooked part of many business plans. You will win credibility and favor in the eyes of investors if you can articulate something real other than a "first mover advantage." It's been said that the first-mover advantage only lasts until there's a second mover.

4. Define, analyze, and explain your customers' needs. Show the investor that you've done your homework. Use as many reliable third party resources (reports, studies, etc.) to show how your business provides exactly what the market is demanding.

5. Talk about the relevant market, not the total market. This is a common mistake in healthcare business plans; the healthcare market, broadly defined, is worth $1 trillion, but that includes everything from knuckle bandages to titanium hips and open-heart surgery. When writing the plan, include the eye-popping market size figure, but be certain to condense that figure down to your relevant market. For example, caffeinated citrus-flavored sodas are a fraction of the global beverage market, but the market size for this specialized product is much more meaningful to an investor.

6. Draw attention to tangible milestones and achievements. Have you been successful in the past? Investors will think you're more likely to succeed in the future.

Lastly you need to ensure that potential investors are clear on what is in it for them. Speak about your dreams and visions all you like, with 99% of people out there, the main issue is being clear on how they will benefit from the deal.

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