Successful business plans strike a balance between unbridled enthusiasm and cautious pessimism in their tone. Neither extreme is right for a business plan and this will influence how you describe both the downsides and upsides of the business.
The potential pitfalls and risks involved with starting your business should be brought up, but not dwelled on in the plan. If they are not raised at all, readers will be concerned. They may believe you are entirely unaware of these negatives, in which case your research is woefully incomplete, or that you are trying to hide these downsides from funders, which means you are being untrustworthy or even unethical.
Instead, you should discuss the greatest risks you face with a clear concept for how they can be minimized. Some risks are common to all businesses, and this is not a place to mention those. For example, key managers could leave or not work out. To minimize the risk associated with this you must attempt to capture the knowledge and connections of the individual while they are with the company. If there is a partner without whom the company will entirely fail (for example, because he or she is the key architect of the product or service), then it becomes important to address how this partner will be tied to the business success through a partnership agreement.
When discussing the positive potential for the business in the business plan, be sure to keep the level of enthusiasm in check to a certain extent. Readers do want to know that you believe in the business and see that come across in the plan, but do not want to see hyperbole about the speed at which the business will take off and how it will be impossible for competitors to catch up. Funders are skeptical about these type of statements and will look for optimistic projections to be backed up by research and sound reasoning.