What do you focus on when preparing a business plan and an investor pitch? The PowerPoint presentation? The Excel financial spreadsheet? The 50-page business plan in Word? As an investor, consultant, and  business plan reviewer, I get asked this question a lot. The answer is: none of the above. Just like you think about the customer for your product or service, think about the investor who is reviewing your business plan. If this is the first business plan they've ever seen, then the formatting or animation of these documents might impress them, and make them believe that you know what you are doing.

However, in most cases the investor is a professional in reviewing business plans. Whether a banker or an executive in a large company, they have seen many business plans, and are looking for something really specific. And they've developed a gut feel for whether the business plan is viable or not--for the most part.

The most important part of your business plan is a simple page that lists your assumptions.

If your assumptions are too rosy and optimistic, your business plan will not be taken seriously. However, if your assumptions are realistic and pragmatic, yet show a solid return on investment, you stand a much higher chance of getting your investment.

Here are three ways you can show how pragmatic and realistic your plan is. 

Provide market data.

Are the sources of market data reliable? Is market growth so high that the numbers become unrealistic quickly? Use solid and pragmatic market data. Show conservative numbers. Those are hard to argue with.

Use analogies.

Are there any other products or services that behave in a similar way to your product? I'm not talking about performance and functionality--I'm talking about sales, adoption rate, and use. When I presented the business case for USB 3, I used the adoption of USB 2 to project the adoption rate of USB 3 in similar products. If zero percent of digital cameras had USB 2 in 2002, and three years later 60 percent of them had USB 2, it was reasonable to assume a similar penetration of USB 3. If USB 3 was expected to be introduced in 2008, then it was reasonable to estimate that 60 percent of the 92 million digital cameras would have USB 3 by 2011. Sometimes the analogies can go further than this, but if you can show a reasonable analogy, your investors will trust the numbers.

Reality check.

A third way to strengthen your assumptions is with a crosscheck of multiple sources of data. Let's say you're targeting the 16 million cars sold in a year in the U.S. You estimate you can sell your product to only one million of those (or 6.25 percent). You may also assume you will double the number of units sold every year--in year two you will sell two million products. By this logic, in year five you would ship 16 million units, and in essence would be shipping to every new car. Is it reasonable to assume that? Furthermore, your 10-year projections may show that in year 10 you would ship more than 500 million units, 30 times more than cars sold that year, and more than the number of people in the U.S. You have to check the realism of your numbers.

Pause after presenting the assumptions.

When you present your business plan, you need to share the assumptions with the investors, and then pause. Ask your potential investors whether any of your assumptions appear to be unrealistic, optimistic, or overly aggressive to them. If the investors do not believe your numbers are realistic--there is no point in continuing. You need to either convince them that your numbers are realistic, or revise them so they become realistic. After all, there is no point in showing overly optimistic and aggressive assumptions, and then showing revenue and profit numbers, just to have the investors doubt the credibility of those numbers.

Once, on the other hand, the investors agree that the numbers are realistic, you can move on to present the revenue, profit, and ROI numbers that will result from them. They will appear so much more credible then.