From considering growth costs to the complete financial outline, here are 10 answers to the question, “What is the most important part of a business plan that sometimes gets overlooked or underappreciated by a founder?”
- Cost of Growth
- Your Emergency Fund
- Roles and Functions in the Organization
- Executive Summary
- Your “Why”
- Market Analysis
- Marketing Strategy
- A Contingency Plan
- The Business’s Target Audience
- The Financial Plan
Cost of Growth
Learning from industry insiders about the costs of growth, such as the true costs of going into a “bricks-and-mortar” channel after being established in e-commerce, and capturing those costs in your business plan is critical; otherwise, you may accept a growth opportunity prematurely that could overly burden the company and put the entire company at risk.
Stephanie Schull, CEO, Kegelbells
Your Emergency Fund
I’ve seen hundreds of business plans in the past year alone, and I’m surprised how often founders and business owners forget to include some sort of emergency fund in their plan and budget!
As a lender, we want to know that our loan is likely to be paid back, and including your plans for a rainy day can give us more reassurance that you are cautious, intelligent and realistic. Most businesses will need to pivot or come upon hard times, especially in their early years. Having an emergency fund to keep up with loan payments or keep the business operating is crucial!
Gates Little, President and CEO, altLINE Sobanco
Roles and Functions in the Organization
One of the most important parts of a business plan that’s sometimes overlooked is the organizational structure, from the umbrella to the roles and functions of each unit and/or individual. In fact, we should also revisit this in every project plan because, as the days get busy and one item overlaps the other, there is a common tendency for lines to be blurred.
And in certain instances, this leads to assumptions (that a task has been delegated already) which turns into confusion with the possibility of chaos. All those who are involved, as well as their level of engagement, must be obvious right at the onset to ensure the efficiency of work, the quality delivered, and not to mention, everyone’s alignment with the business goals and objectives.
Tristan Harris, Demand Generation Senior Marketing Manager, Thrive Agency
The executive summary can be a make-or-break factor in convincing potential investors to fund your business. Therefore, founders must take the time to craft an executive summary that truly captures the essence of their business concept and convinces investors of its potential for success.
An effective executive summary should summarize the business concept, the market opportunity, competitive analysis and financial projections. It should also be concise, compelling and effective in communicating the potential of your business concept. It’s best if it’s written in a persuasive tone that convinces investors of your business’s potential for success.
Todd Saunders, General Manager, BIGSafety
Knowing your “why” for starting a business will sustain you during the long, hard times. It will also keep you grounded and ensure you maintain your focus as you grow.
Simon Sinek wrote in his book, Start with Why: How Great Leaders Inspire Everyone to Take Action that we need to constantly remind ourselves why we started this journey. Why are they starting this business?
Sinek provides multiple examples of individuals who never lose sight of their why and the success that followed. Notable examples include Steve Jobs, Martin Luther King Jr., and even the Wright brothers.
He also provides examples of individuals who lost their “why” or who left taking the “why” with them and had organizations that failed. To quote Sinek, “WHAT companies do are external factors, but WHY they do it is something deeper.” Know your why!
Brianna Bitton, Co-founder, O Positive
The market analysis section is one of the essential parts of a business plan that founders often overlook or underappreciate. This section is critical for understanding the target market, competition, and overall market trends, which are essential for developing a successful business strategy.
Market analysis helps founders identify the size and growth potential of their target market, as well as the needs, preferences, and behavior of their potential customers. It also allows founders to understand their competitors, their strengths and weaknesses, and how they can differentiate themselves.
Despite its importance, the market analysis section of a business plan is often overlooked or rushed by founders. This is because it can be time-consuming and requires a lot of research and data analysis. However, without a thorough understanding of the market, developing a successful business strategy and securing funding from investors is difficult.
Jason Moss, President and Co-founder, Moss Technologies
A business plan without a strong and detailed marketing strategy is just a wish in the air. The marketing strategy is often the most overlooked part of a business plan because founders are too hyper-focused on the product or service that they are launching or selling, that they lose track of building a solid marketing strategy.
Little do they know it is as critical to focus on brand marketing as it is to build products because in order to make a sale, businesses must first be able to effectively and efficiently reach their target market.
Garrett Smith, Head of Local SEO, GMB Gorillas
A Contingency Plan
One of the most important parts of a business plan that sometimes gets overlooked by a founder is the ability to pivot if necessary. This is a key part of any business plan because it helps protect the business from unexpected events or changes in the market that may occur.
Include contingency plans in the business plan so that the business can respond quickly if needed. Overall, the ability to pivot is a crucial aspect of any business plan and it’s something that shouldn’t be overlooked.
Preston Powell, CEO, webserv
The Business’s Target Audience
Many entrepreneurs see their product or service as something that can benefit anyone or a broad audience. Without defining your niche first, you’ll likely face challenges when writing marketing materials and creating a marketing strategy.
When targeting everyone, or a broad demographic, you’re risking your messaging being blurred, and your overall brand may feel like it lacks confidence. Create your detailed buyer’s persona—who is the perfect client who will love your product and be your ambassador? Then, adjust your marketing and messaging strategies to find them, connect with them, and communicate your product or service to resonate with them.
Inbar Madar, Founder and Business Consultant, MI Business Consulting
The Financial Plan
A business plan is an essential document for any startup, but one of the most important parts that often gets overlooked or underappreciated is the financial plan. Without a well-researched and accurate financial plan, a business will struggle to stay afloat.
By projecting future income and expenses, a founder can ensure that they have adequate funds to cover operations, payroll, inventory and other costs. It also provides them with an opportunity to identify any potential cash flow issues and put proactive measures in place to avoid them. As such, creating a detailed financial plan is an integral part of any business plan.
Ray Schultz, VP of Marketing, Liquid Rubber
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