What is the most important part of a business plan?

The business plan is a document that helps to explain the concept of the company and to secure funding from investors; it gives the investors a view of the company. A great business plan will raise the capital needed to start your business. 

I believe the financial section of a business plan is the most important, because it gives the potential investor the breakdown of the financials and it also shows were the revenue is generated from.  It will give the investor the potential profit to be made off the project. 

According to expert Dave Lavinsky most business plans fail to raise money to get a company up and running.  Two reasons why companies develop a business plan is the game plan and the strategy says Lavinsky.  I think you must have a game plan and a strategy of how you plan on developing your business and how you plan to keep the company running and bringing in the revenue needed to satisfy your investors as well as grow the business. 

What I learned from the experts that I did research on is, the plan must be realistic and the plan must fit the needs of the industry.  The plan that I am in the process of developing has the potential to gain investors, because it clearly defines the company financial growth and it shows a steady growth within 3 years.  I was able to implement a few of the 8 factors that Tim Berry identified, it is a realistic plan, it can track results, and it fits the business need of the industry.  I will also use the business plan to do follow-up in the planning process and to ensure that the plan can be communicated to my staff so that the company runs smoothly.  The business plan clearly identifies the assumptions of the company and it gives a clear view for the potential investors. 

"Experts Views on the Value of Business Plans"

Dave Lavinsky and Jay Turo

Lavinsky and Turo used their market research, finance, and small business backgrounds plus their recently gained MBA skills and mentalities to systematically help these entrepreneurs succeed. Since that time, Lavinsky and Turo have built Growthink’s team, client base, and service and product offerings in pursuit of their mission of helping all entrepreneurs succeed.  http://www.growthink.com/about-us

Dave is an internationally renowned expert in the fields of business planning, capital-raising, and new venture development.  Over the past decade, Dave has guest lectured at top universities, developed over 100 business plans, and has written hundreds of articles on entrepreneurship, business planning and capital-raising.

According to Dave Lavinsky there are five attributes of successful business plans. Lavinsky states that there are two reasons why companies develop business plans, to determine the optimum strategy and game plan to grow their business and to raise money.  He goes on to say that most plans fail to raise the money needed to get the companies up and running.  SBA loans have decreased by 56% over the past 3 years. 

The 5 Key attributes of a winning business plan according to Lavinsky is:

1.     The right overall value proposition

2.     The right marketing and sales strategy

3.     The right business model

4.     Action plans developed from reverse engineering success

5.     They are communicated brilliantly

Tim Berry

Founder and chairman of Palo Alto Software and bplans.com, co-founder of Borland International, author of books and software on business planning, Stanford MBA. I believe in business planning but I don’t think a business plan is a document. I’m now chairman of Palo Alto Software, which in my case means blogging a lot, of course, also speaking, writing books, teaching, and helping you with business planning and entrepreneurship.  http://timberry.com/

Tim Berry states, “The value of a business plan is measured in money”.  Business plans are viewed as generic, but business plans can be utilized to get funding from investors, as well as being used as guidance for the company only.  He states that there are 8 factors that make a good business plan:  

1.     It fits the business need

2.     It’s realistic, and it can be implemented

3.     It’s specific, you can track results against plan

4.     It clearly defines responsibilities for implementation

5.     It clearly identifies assumptions

6.     Its communicated to the people who have to run it

7.     It gets people committed

8.     It’s kept alive by follow up and planning process

 A business plan should be followed an updated regularly to benefit the company.  The most important part of the plan is, if it fits your need and is it realistic.  Following the plan can help the company run smoothly.  Berry states that, “ No business plan is good if it’s static and inflexible”.  A good plan is communicated to all parties involved in executing the business. 

http://timberry.bplans.com/2009/02/some-key-questions-on-business-plans.html