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Communicating Your Business Plan. Paul Kirsch Samuel Zell & Robert H. Lurie Institute For Entrepreneurial Studies February 3, 2006. Executive Summary. Core Idea. Elevator Pitch. Business Plan. Power Point. Parts of a Coordinated Message. The Message of your Business Idea.

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communicating your business plan

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

Elevator Pitch

Business Plan

Power

Point

Parts of a Coordinated Message

The Message of your

Business Idea

parts of a coordinated message1
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
    • 2 – 3 minutes
  • Full Business Plan
    • 15 pages + Financials

S.S.D.D

(Same Stuff, Different Delivery)

mbc training sessions

10:30

9/30

Information session on MBC format and process

10/14

10:00

Content and presentation of an effective executive summary

10:00

11/11

Constructing an effective pitch

12/16

12:45

Communicating market pain, size; financial assumptions

1/20

Business plan preparation

10:00

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

MBC Training Sessions
agenda
Agenda
  • Part A: The Presentation
  • Part B: The Content
  • See also SlideExamples.ppt
part a the presentation
Part A: The Presentation
  • Before You Present
  • Building the Presentation
  • The Delivery
  • Using Slides and Visual Aids
  • Handling Q & A
before you present
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.
before you present1
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
before you present2
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
before you present3
Before You Present
  • Style
    • Level of formality
    • Level of interaction
  • Format
    • Multiple speakers
    • Visuals
    • Directed discussion
building the presentation
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
building the introduction
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
building the body
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
building the body1
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
building the conclusion
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
the delivery
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
delivery before you say a word
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
delivery who does the talking
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
delivery
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
delivery1
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
tips for persuasion
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
using slides and visual aids
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
using slides and visual aids1
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
using slides and visual aids2
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
handling q a
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?“betterresult

handling q a1
Handling Q & A
  • Maintain control
  • Maintain credibility
  • Ask for clarity
  • Parse complex or multi-part questions
  • Answer honestly
  • Answer briefly
  • Thank the audience
i don t know
“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
finally
Finally…..
  • Have fun
  • Be passionate
  • Be honest
  • Over-deliver when possible
  • Show energy and enthusiasm
  • GOOD LUCK!
part b the content
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
product and or service concept
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
uniqueness secret sauce
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
market
Market
  • Total Addressable Market
    • All microprocessors – or –
  • Target Market
    • Electronic device manufacturers – or –
  • Market Segment
    • Cell phone manufacturer – or –
  • Ideal or First Customer
    • Nokia or Motorola

Note on terminology

market segment
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
in discussion of market
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
in discussion of market1
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
about the target customer
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?
a note on vocabulary
A Note on Vocabulary

Market ≠ Competition ≠ Industry ≠ Space

Market + Competition + Value Chain Players = Industry

Industry + Technology + Externals = Space

GovernmentRegulatorsTrade GroupsFinancial partnersConsultants

competition
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”
competition1
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?
industry
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?
management team
Management Team
  • Skill
  • Ability
  • Experience
  • Previous experience as a team
  • Drive
  • Smarts
financials
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
financials1
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
other topics to consider
Other Topics to Consider
  • Accomplishments
  • Countermeasures to Risks
  • Intellectual property
  • Porter’s 5 forces and/or PEST analysis
accomplishments
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
risk and countermeasures
Risk and Countermeasures
  • Identify “right” issues
  • Are mitigation approaches realistic

Some common categories to consider

Technology Regulatory

Product Financial

Market Execution

Management

intellectual property
Intellectual Property
  • Protectable, defendable?
  • Status: filed, provisional, granted
  • Type: use, design
  • Advantage is not in HAVING intellectual property
  • Advantage is EXECUTING on intellectual property
porter s 5 forces and pest
Porter’s 5 Forces and PEST
  • Threat of new entrants
  • Threat of substitutes
  • Strength of YOUR suppliers
  • 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
  • Good back-up slides
  • Very visual
  • Demonstrates solid research
communicating your business plan1

Communicating Your Business Plan

Paul Kirsch

Samuel Zell & Robert H. Lurie Institute

For Entrepreneurial Studies

February 3, 2006

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