Business Proposal Pitching

The 10/20/30 theory

What is a business plan?
• It is a written document, which spells out the ideas behind the
business and other business considerations. Its objectives included
the following:
• Identifies the nature and context of the business and why it exists.
• To present the approach to be used in exploiting the opportunity.
• It identifies the factors likely to determine the success or failure of
the venture.
• Serves as a tool to raise capital for the business.
• According to Longnecker et al "business plans can be
viewed as an entrepreneur's game plan which help
crystallise the dreams and hopes that motivated the
entrepreneur to attempt to start a business. Your plan
should layout your basic business idea for the
venture, describing where you are now, where you
want to go and outline how you propose to get there.
Your business plan should explain the key variables
for success or failure, thereby helping you prepare for
different situations that may occur."
When are plans made?
• Start up- there is to plan when a new business idea has been identified and
feasibility studies have to be made. This involves preparing detailed plans
for the intended business.
• Business purchase- a detailed plan is necessary when buying an existing
business plan. Will enable sensitivity analysis to be carried out so that the
purchase is aware of the risk attached to the business and the likely
rewards available.
•  
• On going business review- necessary to check the progress of the start up
or business purchase. Must note that the business environment is always
changing and changes have to be made to ensure that the business
continues to survive. Will enable business to respond to constantly
changing environment.
• Major decisions- there is need for a plan when carrying out major changes
e.g. when adding new products, an additional outlet, new equipment or a
loan fund for expansion purposes.
Why produce a business plan?
• Basically writing a business plan is the most important step in establishing
or buying a business. It helps the owner/manager to crystallize and focus
his/her ideas. I can be used for a variety of purposes including measuring
progress against the plan. It is important to prepare a business plan for the
following reasons:
• Managers/owners and lenders/investors will need to investigate the
following issues:
• Assessing the feasibility and viability of the business or project. Will it work
and become commercially and financially viable? It is better to make
mistakes on paper, before trying the real thing.
• There is need to set objectives and budgets which will give overall direction
and financial targets. This is a basic requirement for success.
• It helps determine the amount of money required to make the plan work.
The assumptions made should be provided when preparing cash flows etc.
• To clarify ideas - helps bring about focus by bringing
together generalised and random thoughts into a clearer
perspective of the concepts and how it can be made to
work.
• Finding out the unknown - looking for information through
research will help to unravel many hiddens relevant to the
business. Useful ideas might be identified which will benefit
the business.
 
• Building the team- building a business plan helps promote a
feeling of participation among those involved. Everyone
involved would want to see he plan succeed. It also helps to
identify team members with different skills, which will
complement each other for the well being of he business.
characteristics of a business plan
• Stanley R. Rich and David Gumpert identified the
characteristics of a business plan that will enhance the
probability of receiving funding from investors. These include
the following:
• It must be arranged appropriately, with an executive summary,
table of contents, and chapters in the right order.
• It must be the right length and have the right appearance- not
too long and not too short, not too fancy and not too plain.
• It must give a sense of what the founders and the company
expect to accomplish three to seven year into the future.
• It must explain in quantitative and qualitative terms the
benefits to the user of the company's products and services.
• It must justify financially the means chosen to sell the product or services.
• It must justify and explain the level of product development, which has
been achieved and describe in appropriate details the manufacturing
processes and associated costs.
• It must portray the partners as a team of experienced managers with
complementary business skills.
• It must show how investors will cash out in three to seven years with
appropriate capital appreciation.
• It must contain believable financial projections with key data explained and
documented.
• It must be presented to the most potentially receptive financiers possibly
to avoid wasting precious time as the company's funds dwindle.
• It must be easily and concisely explainable in a well-orchestrated oral
presentation.
• Business plans should not exceed 40 pages; investors will generally look at
brief reports and avoid those that take too long to read.
The Only 10 Slides You Need in Your
Pitch
• A pitch should have ten slides, last no more than twenty minutes,
and contain no font smaller than thirty points. This rule is applicable
for any presentation to reach agreement: for example, raising capital,
making a sale, forming a partnership, etc.
• Ten slides. Ten is the optimal number of slides in a PowerPoint
presentation because a normal human being cannot comprehend
more than ten concepts in a meeting—and venture capitalists are
very normal. (The only difference between you and venture capitalist
is that he is getting paid to gamble with someone else’s money). If
you must use more than ten slides to explain your business, you
probably don’t have a business.
• Twenty minutes. You should give your ten slides in twenty minutes.
Sure, you have an hour time slot, but you’re using a Windows laptop,
so it will take forty minutes to make it work with the projector. Even
if setup goes perfectly, people will arrive late and have to leave early.
In a perfect world, you give your pitch in twenty minutes, and you
have forty minutes left for discussion.
• Thirty-point font. The majority of the presentations that I see have
text in a ten point font. As much text as possible is jammed into the
slide, and then the presenter reads it. However, as soon as the
audience figures out that you’re reading the text, it reads ahead of
you because it can read faster than you can speak. The result is that
you and the audience are out of synch.
 Title
• Provide company name and logo
• your name and title,
• address, email and cell numbers
 Problem or opportunity
•Describe the pain that you are alleviating or the pleasure you are
providing
•NB: it has to be something that people will quickly recognize and
understand.
Value proposition
•Explain the value of the pain you are alleviate or the value of the
pleasure you provide.
 The product/service (Underlying magic)
•Describe the technology, secret sauce or magic behind your product.
The less text the more diagrams, schematics and flowcharts the better.
•If you have a prototype or demo this is the time for transition to it.
•As Glen Shires of google said “if a picture is worth a thousand words a
prototype is worth 10 000 slides”.
•Your product or service concept has to hit the tone straight away, so
be thorough in your idea formulation.
•Show why it will be a crowd please. Show the order qualifiers and
order winners that surrounds your concept
 Business model
•Explain who has your money temporally in his/her pocket and how
you are going to get it into yours (how are you going to monetize the
idea).
•Eg low cost business with high returns
•Are you making the product/service, is it an original idea (provide
endorsements eg certified organic salad dressing)
•If not your original idea provide manufacturing rights or licenses.
•Choose your path and stay committed to it. Avoid for successful
models and try to duplicate it. Have your won unique model
•Remember that a model is how you are going to make money so it
should communicate to that effect
 Market plan (2-5 year plan)
•Brand name of products/service (its not about the coolest name but
one that is memorable)
•What best represents your brand (look for impressions that last a life
time after first impression)
•Explain how you are going to reach your customers without breaking
the bank (total cost of customer acquisition) – eg digital marketing .
•Market size projections (you can make use of pre-orders to know your
market size) – niche vs mass market.
•Inventory levels (units and amount) and how they shall be financed.
•NB: go out there and talk to customers, show passion and sheer
determination backed by details. Have a vision to build brands and
partnerships
• Provide your tag lines eg. We are on a mission, connecting people etc
• Provide corporate or brand colours etc
• Your tag line should show us who you are and what you want to
communicate to the market.
• The tag lines are used to create metaphors (mental models) that
shape our minds and allows us to notice your product. Thus it has to
be remarkable.
• Try to make other people the centre of your campaign.
• Customers,employees and investors should know where you stand
and what you stand for
 Competitive analysis
•Provide a complete view of the competitive landscape. Too much is
better than too little.
•Use techniques such as Porter’s 5 Forces Analysis
•Also do group mapping
•Show that you are ready to swim with other fish in the pond or big
sea.
•If you cant beat the competition will the idea be sustainable?
 Management team
•Describe the key players of your management team, board of
directors, and board of advisors as well as your major investors (try to
make use that it des not present operational risk)
•How well do you know your craft? Are you going to require
mentorship?
•How does background fits into your product/service? (this will help
sell your idea to investors)
•How will your skills set come in and how will you overcome your
weaknesses?
•It’s ok if you have a less than perfect team. If your team was perfect
you wouldn’t need to be pitching your idea
 Financial projections
•Provide a three year forecast containing not only dollars but also key
metrics such as number of customers and conversion rate.
•Do a bottom up forecast not a top down- let marking figures lead he
way.
•How much money will an investor make . If one invest through equity
and hold stocks, at what price will they sale it. What will be their
margins?
•How much/what stake are you willing to offer to investors eg $80 000
for 10% of the company. This would also mean that your company is
valued at ($80 000/0.10) = $800 000. so you need to understand the
potential of your value proposition.
• Try by all means to avoid venture debt when you are a small firm.
• Also show that you have a great investment philosophy (normally
show through ploughing back the profits and timely acquisitions –
show investment time line 2-5 years)
• Avoid the dark forces of greed because they may cloud your
mind/judgement during negotiations
• Show that you mean business, you are not seeking clarification (so do
your figures properly (you may need somebody to help run the
numbers for you).
NB: show current status and accomplishments to date, timelines and
use of funds