Realism vs. Optimism in the Business Plan

The most important function of a business plan is to create interest among investors so that they write a check. In achieving this goal, business plan writers are often challenged by determining the proper level of optimism in their plan. That is, they must create a compelling story to investors while maintaining credibility.

Optimism shows investors that a company is confident about the market opportunity, its ability to execute on the opportunity, etc. Over-optimism, however, leads investors to believe that the management team does not fully understand the opportunity or the tough road ahead. As such, business plans must be sure to limit over-optimism and show investors they are realistic and credible.

Realism, the opposite of over-optimism, should be used in business plans to portray sobriety and credibility to investors. Realism should manifest itself in management team bios that tell the actual accomplishments of managers, rather than fluff. It should manifest itself in credible market forecasts and sober assumptions of the company’s growth.

While business plans must excite investors so they take action, if they are too optimistic, investors will discount their merit. Conversely, if they are too sober, investors may not feel they will get an adequate return on their investment. As such, business plans should present a compelling, optimistic picture, but continuously refer to hard facts and realistic assumptions to build credibility and genuine excitement

About the author:
GT Business Plans has developed over 200 business plans for clients that have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share. GT Business Plans is the sister site of GT Venture Capital

Business Plans

Way back in business school we had to churn out business plans every semester. As soon as the assignment would drop we would be scrambling for information. Start the number crunching game, do the analysis, do some mental planning and write business plans.

Then we graduated and got jobs. But, we still have to write business plans.

I came across a collection called Business Plans from 'Business-planning-4-you' (http://business.marc8.com/ebook-info.php/name/business_plans/toc_id/1-0-1-5) a few weeks ago. The title caught my eye as I wondered who would be giving away business plans and how many? How would they manage the number of industries? I wanted to find out more.

- It seems that they have over 1500 readymade business plans in their database.
- Covers a wide range of industries: from Abattoir Business Plan to Zen Practitioner Business Plan.
- The cost is $50 as of this writing. That makes it 3 cents per business plan (50/1500 = 0.03).
- They offer about 24 extra bonuses

I know I would be happy with the business plan templates that I could modify and add my own thoughts. I think it would be like instant soup. You have bought the basic ingredient, but you still need to provide a little bit more like hot water and a bowl.

Though I haven't tried the collection myself it looks quite good. I think this would be useful if you are in business school, early part of your career, or even a seasoned business man venturing into new areas.

Till next week and all the best with your business planning!
About the author:

About the Author
Sanjib Ahmad is a Product Consultant for "Business.Marc8.com - Business Best Sellers" (http://business.marc8.com). You are free to use this article in its entirety as long as you leave all links in place, do not modify the content, and include the resource box listed above.