Starting a New Business? 6 Ways to Improve Your Business Plan

A solid business plan is the foundation of any successful business. Not only does creating an effective plan convey that you know where your company is going and know how to get there, but also, it serves as a blueprint'"a layout of steps that need to be accomplished in order to be successful. Here are six ways to make sure your business plan is on point.

1. Do your research. When starting a new business'"or even buying an existing one'"it is imperative for the owners to have a clear understanding of all aspects of the business, including the company's target customers, competitive advantages, local market and competition. Taking time to adequately research your business environment provides you with tons of information and insight into your business environment.

2. Be specific. When describing your company, its purpose, customers, products, and other factors, be specific! Ambiguity in your business plan either means that you don't care or you don't care'"or both! Make investors want to know more about what your plan is, so they will want to be part of it.

3. Stay focused on the stuff that matters. While it is important to cover all major aspects of the business plan, don't get too bogged down in the technical details! Although you should be specific in the information within your plan, you should avoid voluminous details'"if you want to include them, do so in an appendix.

4. Get real about your assumptions. By their very nature, business plans are full of assumptions. The best business plans highlight critical assumptions and justify them (on the contrary, the worst business plans bury assumptions throughout the plan so no one can tell where the assumptions end and the facts begin).

5. In addition to your assumptions -- get real about your projections. Financial projections can make or break a business plan. Too lofty and most investors will walk the other way, as their impression is that either the business owner doesn't fully understand the start-up costs or isn't able to adequately project cash flow. Either situation is not a good one. My advice? Be as realistic and conservative in your projections as possible.

6. Be grammatically correct. The little things (i.e. spelling, punctuation, grammar, style) are often overlooked, but can actually have the most impact on the reader of your business plan. While investors don't expect invest in a company run by English majors, when they see a business plan with careless grammatical errors, they tend to wonder about the business owner, his level of competency, and attention to details. As these attributes are critical to successful business owners, a business plan with lots of mistakes shows investors that they need to look elsewhere.

A well-thought-out business plan is the first step down the road to a successful business. Not only does it serve as the blueprint for your company, but also, it arms the business owner with the means to a successful business. Use it wisely!