Effective Business Plan Presentations

Bill Warner Thursday, January 03, 2008

Whether or not you are approaching venture investors or simply trying to convince someone of the attractiveness of your company, you need to have a well thought out presentation that tells the story about your business in a compelling and exciting way. Nobody is going to invest in or join your company if you cannot effectively explain why they should be spending their time and money to participate in it.

The first step in communicating your business plan is to explain enough about it so that your audience wants to spend more time with you to learn more of the details about your business. In whatever media you choose to present your business plan, there is some fundamental content that your presentation should have. Your story starts with a clear description of the great opportunity that you are going after and ends with why an investor, potential partner or prospective employee should join you.

The structure of your presentation is depicted above, on a timeline of 10 to 15 minutes during which the completeness of your business story is achieved. Believe it or not, any business can be described in this manner and in the time indicated. If you can’t, then you may not really understand the essence of your business.

Fundamental Content

There are ten major areas you need to cover in order to effectively communicate the fundamentals of your business to anyone.

The Opportunity

Every good business is founded in a compelling need that is being successfully filled. You need to describe the very important problem that you are solving or the exciting opportunity that you are driving after. Some business people call this the “pain” that your buyer feels and that you will cure. Some call it the “big hairy” problem that you solve. Others call it the “no brainer” opportunity that you have found. Whatever you call it, this part of your story establishes:

  • There are real potential buyers for your product or service
  • That you know who they are in detail and know where to find them
  • Their need is compelling and real
  • The fulfillment of their need is a high priority for them
  • It is obvious why they will spend money to have the need filled

The Solution

Briefly explain what your product or service is, focusing on how it satisfies the buyer’s need that you just explained above. Describe it from the perspective of the buyer; not your own view. Highlight the benefits and value that the solution brings the buyer. Don’t dwell on “feeds and speeds,” but express your solution in results oriented language that relates to the buyer’s need. This part of your presentation establishes:

  • There is a compelling product or service being offered
  • It has real value and brings material benefits to the buyer
  • It clearly addresses the buyer’s need
  • That your solution is a “must have;” not a “nice to have”
  • There will be high probability that they buyer will buy

These first two fundamental areas will make or break the interest of your audience. At this point, you will have essentially revealed what business you are in. If your audience is on the edge of their chairs wanting to hear more, you have really grabbed their interest. If not, you will probably not get any traction.

The Market

Now that you have grabbed the audience’s interest, you can start talking about the business in a little more depth. Explain some of the important aspects of your market segment, establishing:

  • A brief picture of the industry landscape
  • Your specific market segment; where you are focused
  • The maturity of the market segment
  • The details of the buyers within our segment
  • That the market is large and growing over the next five years
  • Where revenue will come from
  • What the driving industry trends are

Competition

Every business has competitors. At the least, it is the status quo that you are up against. Or, you could have many well entrenched competitors who address the buyer’s need in various ways. You need to portray how you are going to win.
Summarize the key competitors by portraying their strengths and weaknesses, and explain what differentiation you have that will beat them. You need to establish:

  • That you know who the competition is
  • You have a product or service that is superior
  • That you have a winning game plan for beating them
  • Why the buyer will buy from you; not the competitors

Product or Service Description

Briefly describe “what you are selling;” the product or service that your sales team will actually sell to the buyer. Describe its salient features and the benefits they bring to the buyer; highlighting those that differentiate you from your competitors. Bring this to life with examples, showing why it’s a winner. You need to establish:

  • The product our service will be a competitive winner
  • That it really meets the buyer’s need
  • When it will be ready for market
  • That there is a viable delivery approach

In concluding your description, summarize the barriers to entry. There is no need to give away the intellectual property farm, but you need to explain the results of your “secret sauce.” You need to show that not everybody can easily get into your business, establishing such things as:

  • Time to market advantages
  • Unique skills and know-how
  • Ownership of an intellectual property portfolio
  • Certifications
  • Unique technology development
  • Contracts and exclusivity
  • Regulatory approvals

Marketing Plan

Start with your value proposition. Take some time to concisely explain the value your product or service brings to the buyer. This is a prelude to your marketing plan, showing that you know how to clearly explain the benefits you bring to the buyer and can quantify its value. In effect, you are explaining “why the buyer will buy,” and establishes:

  • There are clear and compelling marketing messages to the buyer
  • The value is known and can be demonstrated
  • That the buyer will see a viable return on investment

This is all about generating sales leads. Don’t get hung up in brand management issues, corporate communications and public relations. Get right to the point about how you are specifically going to find your buyers and deliver your marketing messages. Describe your revenue model. If possible, explain what your pipeline of customer prospects looks like, demonstrating that you are getting market traction. The more you can bring this to life with customer names and established buying situations, the stronger your story will be. Most companies fail because they don’t have an effective way to reach the market and close sales. Show that you know exactly how you will reach the market, establishing:

  • You know how to reach the buyer through specific awareness programs
  • That there are specific marketing objectives for generated leads
  • You have a pricing approach resulting in an effective revenue model
  • That you have a solid pipeline of sales prospects
  • You now where and when business will be forthcoming

Sales Plan

Explain your sales model and process; for example, direct, indirect, OEM. Outline your readiness for sales. Describe your near term sales objectives and your status. Also, if possible, bring this to life with examples of key account situations and next customers to close. You need to establish:

  • You have a sales process
  • There are clear objectives to be met
  • You know how to get sales traction
  • That you know where the next sale is coming from

Management team

It’s important to show that the company is in the hands of a great management team that can be trusted to take the company forward. This may be the most important confidence builder in your presentation. The most important things to establish are:

  • The roles played by the top executives
  • Their past business experiences and results achieved
  • They have relevant industry experience
  • They have solid management and leadership experience
  • Their experience is relevant to the size of company you have

Financials

You need to provide a forecast of key financial results: revenue, gross profit, net profit, cash flow and position, and significant capital needs. Explain your current financial status. If needed, show when you will be profitable and cash flow positive. Highlight the near-term timeline for major business milestones. Many people believe this to be crystal ball kind of stuff and it is. However, the important thing you are demonstrating is that you have a clear view of the dynamics of how revenue and profit will be made, by establishing:

  • The revenue track you are expecting
  • There is a complete view of the costs and expenses
  • That cash flow dynamics are understood
  • You know how much money you need to run the business

Business Summary

Structure your summary to your audience and what they need to hear. Most people will want to know that there is a:

  • Large and high growth market
  • Compelling buyer need
  • Unique winning product or service
  • Clear path to market
  • Rapid track to financial success

If you are looking for financing, you will also need to include:

  • Amount being raised
  • Use of funds
  • Description of financing instrument
  • Pre-money valuation
  • Exit strategy
  • Projected investor returns

Summary

By covering these ten fundamental areas, you will provide a complete and concise view of your business that most people will understand. By focusing on the most important aspects of your business, and clearly netting it out, you will maximize your chances of your audience being interested in taking the next step with you.

Filed Under: Angel Investment, Financing a Company, Business Strategy and Planning



Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.

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