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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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