Transcript Slide 1

Communicating Your
Business Plan
Paul Kirsch
Samuel Zell & Robert H. Lurie Institute
For Entrepreneurial Studies
February 3, 2006
Parts of a Coordinated Message
Executive
Summary
Core
Idea
The Message of your
Elevator
Pitch
Business Idea
Power
Point
Business
Plan
2
Parts of a Coordinated Message
• Core Idea
– 5 Breaths
• Executive Summary
– 2 – 5 pages generally accepted
– 3 pages for MBC
• PowerPoint
– 8 – 15 minutes
• Elevator Pitch
S.S.D.D
(Same Stuff,
Different
Delivery)
– 2 – 3 minutes
• Full Business Plan
– 15 pages + Financials
3
MBC Training Sessions
10:30
9/30
Information session on MBC format and process
10:00
10/14
Content and presentation of an effective executive summary
10:00
11/11
Constructing an effective pitch
12:45
12/16
Communicating market pain, size; financial assumptions
10:00
1/20
Business plan preparation
12:00
2/3
How to present your business plan
10:00
2/10
Open workshop on presenting your business
2/17
$30,000+ in awards incl. Pryor-Hale Award for Best Business
4
Agenda
•Part A: The Presentation
•Part B: The Content
•See also SlideExamples.ppt
5
Part A: The Presentation
•Before You Present
•Building the Presentation
•The Delivery
•Using Slides and Visual Aids
•Handling Q & A
6
Before You Present
• Purpose
– Convince investors, backers, business partners,
customers of the value in your business
proposition
– Demonstrate ability of management team
• Audience - generally
– Business professionals familiar with space,
technology, management team, etc.
7
Before You Present
• Occasion
– Contest, informal or impromptu, formal
• Structure
– Know time expectations
•Elevator pitch: 30 seconds to 3 minutes
•Initial pitch: 10 – 15 minutes
•Formal presentation: 15 minute to open ended
– Q & A arrangements
•Dedicated time
•Expected interruptions
8
Before You Present
• A few comments about BPC audiences
– They want you to succeed
– Business professionals who may or may not
know about your industry or technology
– Can you discover status, experience, education,
age, gender, race, relationships, etc.?
– Already believe you before the presentation; it is
up to you to LOSE support
9
Before You Present
• Style
– Level of formality
– Level of interaction
• Format
– Multiple speakers
– Visuals
– Directed discussion
10
Building the Presentation
• Three “universally” defined segments
– Introduction
•10% of total speaking time
• 2 slides: title and agenda
– Body
•85% of speaking time
– Conclusion
• 5% of total speaking time
• 1 slide: conclusion
11
Building the Introduction
• Multiple purposes
– Get attention
– Establish credibility
– Manage first impressions
– Greet audience, primarily judges
– Introduce team
– Set agenda with main points
– Develop sense of rapport and goodwill
– Give purpose and/or goal
12
Building the Body
• Contains your main points
– Product and/or service concept
– Uniqueness, secret sauce
– Business model
• What do you do? / How do you make money?
–
–
–
–
Market
Competition & Industry
Management Team
Financials
• Sequence is NOT pre-determined
13
Building the Body
• Techniques for presenting data
– Repetition
– Varied and interesting visuals
– Varied and illustrative data
•Facts
•Research
•Quotes
•Stats
– Transitions
•Not always needed but FLOW always a consideration
14
Building the Conclusion
• Last and lasting message to audience
– Restate goal
– Review main points
– Ask for action or leave with challenge
– Maintain credibility
– Maintain sense of goodwill
– Provide closure, ask for questions
15
The Delivery
• Utilize multiple channels
– Multimedia
– Examples of product or technology
• Variation is critical
– In slides
– In vocal quality
– In pace
– In data
• Use organizational cues….carefully
16
Delivery: Before You Say a Word
• Owning the room
• Demonstrate an effective TEAM
• Use your physical presence
• Introductions
• Manage your reputation
• Impressions begin forming before you speak
17
Delivery: Who Does the Talking
• Multiple speakers whenever possible
• Strongest speakers first and last
• CEO must speak
• Speakers speak while team members run
equipment
– Speaker never clicks a mouse
• Speakers’ main focus is the audience NOT
the presentation
• Transitions
18
Delivery
• Get audience attention
• Develop & build relationship
• Demonstrate ability to think on your feet
• Involve and engage audience
• Eye contact is critical
• Humor can be useful tool
• Energy and passion sell
• Credibility is critical
19
Delivery
• Practice and get feedback
– Eliminate “um” and “ah”
– “So” is not a transition
– “we hope” and “hopefully”
• Adhere to time limits – No Excuses!
• Do not get bogged in detail
• Do not use up-speak
• Pause to separate and emphasize words and
ideas
20
Tips for Persuasion
• Repeat, repeat, repeat
• Chose appropriate appeals
– Logos – logical
– Ethos – idealistic
– Pathos – emotional
• Supply data, all types
– Check your math…..PLEASE!
• Explicitly establish credibility, when possible
• Fulfill audience needs
21
Using Slides and Visual Aids
• Use medium to dark background with light print or
• Black text on white or lightest gray background
• Use slide template
• Develop brand recognition
• Use builds economically on busy slides
• Use boring transitions
• Use slide numbers
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Using Slides and Visual Aids
• Use presentation, sans serif font
– Helvetica
– Arial
– Tahoma
• Use large font size
– 36-44 titles
– 24-32 main headers
– 22-28 secondary headers, no smaller than 18
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Using Slides and Visual Aids
• Handouts
– What and when to give
– Consider “leave-behinds”
• Talk to audience - not screen
• If you must, carry note cards - not paper
• Fewer distractions are better
• Graphical representations almost always better
• Less is more
– One main idea with ≤ 7 chunks per slide
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Handling Q & A
• Know your approach before presenting
• Ask boldly for questions
• Entire team fields questions
– Ideally, one team member answers each question
– Limit parroting
• Repeat question for you and audience
– Amplification rules
• Check body language
"oh really?“
"is he STILL talking?“
better
result
25
Handling Q & A
• Maintain control
• Maintain credibility
• Ask for clarity
• Parse complex or multi-part questions
• Answer honestly
• Answer briefly
• Thank the audience
30
“I don’t know”
• Say “I don’t know” without delivering a
negative or uninformed message
• It’s okay to not know
• SAYING “I don’t know” is a credibility killer
• Try: “That’s a very important issue for us, and
we’re trying to get our arms around that.”
• Use this as an opportunity to demonstrate
knowledge of complex and interrelated issues
and relationships
31
Finally…..
• Have fun
• Be passionate
• Be honest
• Over-deliver when possible
• Show energy and enthusiasm
• GOOD LUCK!
32
Part B: The Content
• Product and/or service concept
• Uniqueness, secret sauce
• Business Model
– What do you do? / How do you make money?
• Market
• Competition & Industry
• Management Team
• Financials
• Other topics
33
Product and/or Service Concept
• Demonstrate market need clearly, cleverly, in
common terms
• State how your solution addresses the need,
again in plain language
• Discuss the status of development; e.g.:
– Prototype in development
– First location opening in Q3
– Manufacturing contract finalized
34
Uniqueness, Secret Sauce
• What is your competitive advantage?
– Technology – protectable and protected
– Implementation – “land grab”
– Execution - performance (ex. Starbuck’s)
– Strategy – examples include
•1st mover or 2nd mover advantage
•Niche market
– Differentiate
•Articulate what makes your solution different AND
better than others
35
Market
• Total Addressable Market
– All microprocessors – or –
• Target Market
– Electronic device manufacturers – or –
• Market Segment
– Cell phone manufacturer – or –
• Ideal or First Customer
Note on
terminology
– Nokia or Motorola
36
Market Segment
• Set of potential, actual customers
for
• Your set of products & services
who
• Have a common set of needs, wants
and
• Refer to one another when making buying
decisions
37
In Discussion of Market
• You must size the market
• You must size the segments
• By credible means
• Three measures
– Total dollars spent
– Number of customers
– Number of units sold
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In Discussion of Market
• Do not offer the 1% solution
– Why aim so low?
– How many customers is this?
• Understand advantages of large markets
and segments
39
About the Target Customer
• Is there an identifiable buyer?
– Accessible to your channel
– Able to pay
• What is the market pain? Reason to buy?
– Can customer wait a year? (she will)
• Does full product address full market pain?
– Are auxiliary features, products, services
needed?
40
A Note on Vocabulary
Market ≠ Competition ≠ Industry ≠ Space
Market + Competition + Value Chain Players = Industry
Industry + Technology + Externals = Space
Government
Regulators
Trade Groups
Financial partners
Consultants
41
Competition
• Does competition exist?
– No identifiable competition = No identifiable market
• Degree of competition can vary depending on
– Improvement  |--------------------|  Innovation
– Evolution
 |--------------------|  Revolution
• What are your potential customers doing
today?
• NEVER say “no competition”
42
Competition
• Who do you directly compete with?
• Who do you indirectly compete with?
• Whose products are you substituting?
• What will their response be?
• How able are they to respond?
43
Industry
• What are the relationships in the industry?
– Value chains
– Financial
– Governmental and regulatory
• How does this help/hurt your operations?
• How does affect exit?
44
Management Team
• Skill
• Ability
• Experience
• Previous experience as a team
• Drive
• Smarts
45
Financials
• Need to demonstrate that your business model works
• Discuss relevant, most interesting items, e.g.:
First sale | break even pt | profitability | exit & return
• Projections
• Assumptions
• Graphs
• Unit costs
• Scaleability
46
Financials
• Based on 4 sets of information
•Income statement
•Balance sheet
•Cash flow statement – derived from IS and BS
•Sources/uses of funds – snapshot in time
– All work together and reflect SAME
assumptions
• The Good, The Bad and The Likely
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Other Topics to Consider
• Accomplishments
• Countermeasures to Risks
• Intellectual property
• Porter’s 5 forces and/or PEST analysis
48
Accomplishments
• Demonstrates activity
– Not an “academic” exercise
• Progress is important
• Shows ability to plan and execute
• Can be integrated into milestones and
demonstrates critical path
• Builds credibility
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Risk and Countermeasures
• Identify “right” issues
• Are mitigation approaches realistic
Some common categories to consider
Technology
Product
Market
Management
Regulatory
Financial
Execution
50
Intellectual Property
• Protectable, defendable?
• Status: filed, provisional, granted
• Type: use, design
• Advantage is not in HAVING intellectual
property
• Advantage is EXECUTING on intellectual
property
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Porter’s 5 Forces and PEST
• Threat of new entrants
Good back-up slides
•Very visual
• Threat of substitutes
•Demonstrates solid
• Strength of YOUR suppliers
research
• Strength of YOUR customers
• Competitive environment and rivalry
See Appendix 3 of the “New Business Road Test”
• Political– can include regulatory
• Economic
• Social – can include environmental
• Technological
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Communicating Your
Business Plan
Paul Kirsch
Samuel Zell & Robert H. Lurie Institute
For Entrepreneurial Studies
February 3, 2006