It is not uncommon, particularly if the plan is being used to seek capital, for the entrepreneur to be asked to do a presentation of the business concept, highlighting the key points of the business plan. Usually this occurs after the potential funders have read the executive summary and perhaps done a cursory reading of the business plan. In any case, they feel it is worth their time to hear from the entrepreneur and the founding team to judge whether they measure up to expectation.
A. Presentation Dos and Don’ts
The presentation of the business plan should answer the fundamental components of the business plan such as Business Concept, Founding Team, Industry/ Market Analysis, Product/Service Plan, Operations Plan, Marketing Plan, Financial Plan, Growth plan, Contingency Plan and Harvest Strategy and Timeline to Launch.
The presentation itself should take at least half an hour, though questions and discussions will probably follow. It should catch the audience’s attention in the first 30 seconds. This is usually accomplished by the compelling story of the pain in the market that the new venture will cure.
The presenter should stand without using a podium. This allows for better command of the situation, enhances rapport, and makes it easier to use gestures and visual aids. The presenter should feel free to move around (but no pacing). Moving helps reduce stress and livens up the presentation. The presenter should maintain eye contact with everyone and talk to the audience, but not over their heads.
Visual aids, such as color PowerPoint slides or overheads, keep the presentation on track and focused on key points. Be careful, however, not to dazzle the audience with too many overheads, or listeners may find themselves more interested in the rhythm of the slides’ motion. Keep the slides simple (no more than five lines per slide), big enough to read, and professional looking. The technology, (overhead projector, PowerPoint projector, or the like) should be tested before the presentation to be sure it’s working correctly.
All key members of the founding team should be involved in the presentation. If there is a service or product involved, a live demonstration helps to generate excitement about the concept. Most importantly, the presenters should practice the presentation in advance for a small group of friends or colleagues who will critique it. Alternatively, a practice session can be videotaped so that the founding team can critique themselves.
B. Answering Questions
When the founding team has successfully made it through the presentation, it has cleared the first huddle. The second huddle, however, is harder: answering questions from investors. One thing to remember about investors is that they generally like to ask questions to which they already know the answers; this is a test to see whether the founding team knows what it’s talking about. Furthermore, investors often ask questions that either require an impossibly precise answer or are so broad that it’s hard to tell what the questioner is looking for.
Another type of question typically asked is “What are the implications of…?” With this question, investors are looking for an answer that addresses their needs and concerns relative to the request for capital. Finally, the type of question that poses the most problems for the founding team is the inordinately complex one that contains several underlying assumptions. For example, “If I were to analyze your new venture in terms of its market share before and after this potential investment, how would the market strategy have changed and how much of the budget should be allotted to changing that strategy?”
The first thing an entrepreneur should do when faced with such a complicated question is to ask that it be repeated, to ensure that she hasn’t missed anything or made an incorrect assumption. Alternatively, the entrepreneur can restate the question and confirm that she has understood it correctly. She can then ask for a few minutes to formulate an answer.
The entrepreneur may feel comfortable answering only part of it: for example, the entrepreneur may have evidence that could be presented to support a change in market share as a result of the capital infusion. On the other hand, it is critical not to commit the venture to any course of action or any budget amount without having had time to consider it further and gather more facts. Saying this in response to the question will no doubt gain the entrepreneur a measure of respect, for having demonstrated that she doesn’t make important decisions precipitously, without considering all the facts.
If investors ask a factual question to which the entrepreneur does not know the answer (usually, such queries are tangential to the business plan and are asked to see how the entrepreneur will respond), the entrepreneur should admit that he does have that answer off the top of his head but will be happy to find it after the meeting is over and get back to the questioner. If the presentation or anything the team has proposed is criticized (a likely possibility), the entrepreneur should be careful not to be defensive or to turn the criticism in any way to the audience.
Preparing and presenting the business plan is the culmination of months of work. The business plan represents the heart and soul of a new venture, and it has been researched thoroughly and written well, it can enhance the chances of stating a successful high-growth venture. Entrepreneur should understand, however, that a business plan is not just for those staring new businesses, but for the growing businesses as well. The business plan allows for bench-marking progress toward company goals. It establishes the purpose, values, and goals of the company that will guide its decision making throughout its life. No entrepreneur plans to fail, but many fail to plan and thus end up reacting to situations in the environment instead of proactively dealing with a changing environment.
Understanding a business plan is certainly a daunting task, but it is an important exercise that helps an entrepreneur understand more clearly every aspect of the new venture and how all the pieces fit together. Even successful entrepreneurs who have started businesses without a written plan have had to write business plans when they needed growth capital or a credit line from the bank. Those starting high-growth global ventures often find that they need outside capital and resources fairly quickly, so a business plan is essential.