Entrepreneurs who are bringing a new product or service to the market must often seek funding to support their plans. Many times they cannot obtain a loan because lenders are uncomfortable with the risk associated with the venture.
Therefore you may have to seek investors who are willing to take on this risk and become part owners of your business, thereby sharing in future profits. Preparation and practice are critical to effectively presenting your plan to these potential investors. Here are some tips that will improve your chances of success.
1. Know your audience. Be sure you understand what these potential investors want to know. Consider what they may already know about your venture and what points will be of most interest to them, especially information relating to their expected return on investment and its timing.
2. Clearly describe the product/service benefits. Investors must understand what your product or service is. Be able to clearly describe its function and features. Investors must also see what your product or service really does for the customer. Describe the benefits and why customers will be motivated to make a purchase.
3. Show your competitive edge. Demonstrate that you have thoroughly researched and understand the market and competition. Be able to show what makes your product or service unique and how it will stand out from the competition to your targeted customers.
4. Present a strong management team. The ability of your management team to make this venture a success is a key issue to your potential investors. Drive home the skills, experience and talent you and your team bring to this venture. Show you are a leader and are passionate about your business.
5. Discuss the risks. Do not avoid discussing risk. Show the investors that you have considered the risks associated with your venture and the potential threats to its success. Discuss how you plan to deal with these threats if they occur.
6. Show them the money. Be sure you thoroughly understand your numbers and can communicate the financial picture for this venture. Develop financial projections and show investors what investment is needed and the expected return on that investment. Investors will also want to know the timing of their potential return on investment and how they will exit from the business.
7. Prepare for questions. You will not just make your presentation and sit down. Your audience will have questions about your venture, so be sure you leave time for this. Consider what questions may arise and be prepared to answer them during and after the presentation.
8. Properly use visual aids. Visual aids such as a computer with projector, flipcharts, videos, etc., can help you communicate critical points to investors. But remember that these are just tools. Do not let them take over or even ruin your presentation.
9. Sharpen your presentation skills. Not everyone enjoys presenting or has the proper skills to do a great presentation. But there are numerous books, articles, online seminars, videos, etc., that will help you learn how it is done. Spend some time educating yourself and sharpening your presentation skills.
If you are nervous about making mistakes, remember your purpose. This is not about being perfect, it is about communicating what you believe about your business and turning your audience into believers.
So focus on the presentation and effectively engaging and interacting with the audience. Maintain eye contact instead of constantly looking at the screen or computer. Smile and be enthusiastic.
10. Practice, practice, practice. Practice your presentation over and over until you and your team are thoroughly comfortable with it and can do it within the allotted time.
Practice in front of your financial adviser, business consultants and other small business owners to get feedback on content and delivery. Work on it until you can deliver a smooth presentation without the distractions that can result from lack of preparation.
To summarize, your presentation must effectively communicate to investors your proposed venture’s potential to succeed and achieve an attractive, timely return on their investment with an acceptable level of risk.
Connie Edwards is a business consultant with the University of Georgia’s Small Business Development Center. Contact her at 912-651-3200.