Archive for category Pitch
Executive Summary of the Executive Summary
Posted by Steve in Miscellaneous, Pitch on June 23, 2009
Every investor wants an executive summary. It is the entire business plan in miniature form: 1 or 2 pages. Typically, it is written after the business plan but since it is either the first thing or only thing read by potential investors, it needs to be the best written.
There are different ideas on how to write an executive summary. Some say it should be the plan in miniature with the same outline. Others say it should outline the problem, background information, proposed solution, alternatives, and any conclusions. I suggest that the executive summary be a highly selective form of the business plan with sections answering the following key questions:
Bottom line, what is the goal?
What is the market proof the company should do this?
What is the management and existing company and what are the key accomplishments to date that state they should get investment? Why them?
What is the first item the company will produce with the money, and therefore, why do they need the money (how is the money going to be used)?
What are the high level elements of the marketing plan and are there any key activities happening now?
Why will this project be successful?
What is the major risk issue and how is it being addressed?
Why is the company talking to outside people and what do they want from the investor? What is their exit plan and how will they repay the investor/bank, etc?
These are the key points that the primary audience (investors, loan officers, etc) need to know if they want to read further or throw it back in the pile. This information will get the attention of the reader, and give them an incentive to read more or talk to you. More on each question later…
Asking for additional money – use a reserve
I met a film maker on a flight this week and we talked about his project proposal. He is funding his film himself but also seeking angel investors. The total amount he is seeking is $125,000 and he plans to market it via some traditional channels in the film industry.
Independent films are marketed primarily by the distributors and require little dollars from the film makers. Typically, the budget only covers making the film and a few expenses related to getting it into distribution. However, some filmmakers do include a marketing budget as they plan on taking the film to festivals. This film-maker plans on applying for many film festivals and hopes to get into a few. Some festivals may fly him there, but overall there will be some expenses.
The question is whether he should include the travel dollars in the budget. This may be logically sound but he pointed out that an additional $25,000 was an increase of about 20%. Would the investors shy away? Is there enough difference between $125,000 and $150,000 that would cause investors to say no at the higher amount? His point was that for the targeted investors this was a big difference.
He may be right. For some of his target investors $125,000 may be a stretch; they may use fund raisers. A additional $25,000 could crater the idea. However, I think it’s a matter of how you pitch it.
The other problem is that most investors expect to see marketing expenses. They know that without marketing then there are little chances of getting their money back and make a profit.
One idea is to propose a budget that is $150,000 but that $25,000 of that is targeted for a marketing reserve with specific points on where it might be used. If that money is NOT used, then it would be immediately paid back to the investors. In reality you could pitch it as $125,000 plus a reserve of $25,000 that would be only be used for X and paid back in a year if it is not used.
In conclusion, my recommendation is that you do need to include a marketing budget (or a contingency budget), but it could be presented as a reserve. This reserve is not used unless needed. It can be paid back immediately and not count towards shares (%ownership) but that really depends on what is negotiated.
No web site is an option
Ever seen a bad web site? If not, check out webpagesthatsuck.com
I can point you to several. I wonder sometimes why the person put up a site. Probably because they were told they needed one, and did not have the skills, time or money to put it together well. Worse, as you can see from webpagesthatsuck.com, they did have the skills, time and money and put up something. They put up horrible pages.
If you do not know why you need a website, and do not have the skills-time-money to put one up then do not put one up. A bad presence is worse than no presence. When you look bad, people have the proof that you look bad. At least with no presence, it is still a question.
Linked-In is the best for your professional image
Posted by Steve in Execution, For Job Seekers, Pitch on April 29, 2009
Determining where to start marketing online can be difficult. There are so many options now it can be mind-boggling. The approach is not to shotgun (unless you have a huge budget and time, which none of us really have). Instead, first identify your goal and the desired budget. Within those two parameters then consider the softer parameters of skill set, time capacity and deadline. Finally, weigh the pros and cons of being a participant on someone else’s site, being a contributor with your own presence on a community site, or authoring your own site.
Considering that I need to pick something that fits entrepreneurs, investors, and job seekers, does not require a big investment of time and money, and requires little talent, I have my short list of the following: LinkedIn and Plaxo. I do not include Facebook today, but that may change tomorrow.
My favorite is Linked-In at www.linkedin.com
The site is for professionals communicating to other professionals. You enter your professional history (essentially a resume) and then connect to others. You can endorse other people and use it to ask questions to get expert help.
The only way to have a conversation with someone is one of three ways: introduced by a mutual acquaintance (best), introduced by the computer, or to select them as a “friend” and hope they do not ignore you when they realize you are a stranger. The idea of being introduced by someone you both know is the same approach to getting the investor’s or the hiring manager’s attention. Since it matches what you are trying to achieve in the real world, I believe it is one of the best sites to have a presence.
There are different levels of membership from free to $200/month. Personal memberships are free but do not allow for introductions or membership in their OpenLink network (the ability to send messages to others). For that you have to buy a monthly membership that starts at 19.95/month…or do you? There is a “hidden” level of membership that is called a Personal Plus, and allows for a limited number of introductions and for you to be a member of the OpenLink network where you can receive messages and where you can search for other members. It is only $60 per year (or $5/month).
Why Linked-In and not some of the others? The brand is about professionals meeting other professionals to make professional connections. It is almost unique in that you cannot really talk about your hobbies, put up pictures of your pets, or make “shout-outs”. Other sites mix professional with personal so much that it seems to dilute everything to the personal slant. It is hard to take someone serious when they have the pictures of them getting drunk at a party or they show pictures of their friends getting drunk at a party.
You can also market yourself on Linked-In by answering the questions people pose (or look for people by posing questions). With it being a structured presentation of your professional self, you can use it as your personal site.
Of all the networking sites, for these reasons, Linked-In is the only site I recommend today for entrepreneurs, investors and job seekers.
The other sites really depend on what you are trying to do and your end game. Some are great for marketing in the entertainment space, or making personal connections. Others are excellent for searching for a job or leaders for your company. More on that tomorrow…
Can a Duel Focus work?
Posted by Steve in Customers, For Job Seekers, Pitch, Plan on April 22, 2009
What if you have two things you could do? You do not want to leave out one for fear of closing off that opportunity. The dilemma is very common for entrepreneurs: the company can do two things very well and it is struggling for cash flow. They are not established enough to have two brands, or well understood brand extensions.
First, let us examine the entrepreneur case and why this is important. As an investor, there are many questions that come up. First, are these products (and/or services) related? Second, does the entrepreneur truly need to spend the resources promoting both or are they better off picking one and spending double the resources on that one? Thirdly, are they mixing the message too much to the marketplace and thus confusing them? Fourth, is the entrepreneur just unwilling to focus on one thing?
All are valid questions, but as you can see, there could be a tendency for the investor to start thinking along the negative path. This puts doubt in their minds about the company and about the entrepreneur. This also troubles potential customers, because they are now taking a risk on a startup and want to know whether the company will deliver on-time, on budget, and with the expected quality and service. (Please note, I did not say best price, best quality, best service…that’s for a later article).
The suggestion is for the entrepreneur to ask themselves the same questions. If the answer comes up that these products (and services) are related then the question is how to pitch them?
This is nothing new, so we can look at the traditional marketing answer: Know your target audience, and pitch the appropriate message to the right channel! Pick the channels and understand how they work. Deliver the focused message on each product to that channel.
As an example, let us take a shoe company that has a patented shoe which provides the best support to active people. This company could make basketball shoes, running shoes, football shoes, soccer shoes, climbing shoes, and even men’s and women’s dress shoes. They have a factory and craftsmen that can make any type of shoe; and needing cash flow they instruct manufacturing and sales to sell to everyone. (Note: Everyone is our customer is for another article)
What if the company came out and said: “We make the best shoes, whether you it is a business dress shoe or a basketball shoe, then you need to come to us?” People would not believe it because there are already companies out there that specialize in one over the other and they do not mix up their brand.
One answer is for the company to break it up into channels. They pitch the sports shoes publically as an active shoe company: We make the best sports shoes because we understand the needs of the athlete! Advertisements during basketball games are for the basketball shoe. Advertisements during football games are for the football shoe. They could even make crossover advertisements that feature athletes from multiple sports with the common theme that they need these shoes to compete better in their sport.
For the dress shoes, they instead partner with another company that specializes in dress shoes. The sports company provides the technology to make the dress show more comfortable and fit better. They can even co-brand the shoe with their name; however, they let the dress shoe company lead off with their brand and their advertising. The sports shoe company hopes that their sports advertising creates enough of a brand impression that the dress show buyer wants that dress shoe. The dress shoe company hopes the same thing, obviously.
How do they pitch to investors? First, since they are going to promote themselves as a sports shoe company, they should pitch as a sports shoe company with a patented shoe. In the pitch, they describe how they will target the different sports channels and leverage their ability to make sports shoes to go after these channels. Also, in the pitch, when they come to product line extensions, then they can discuss their partnering opportunities, “Since we hold the patents on the technology, we will also be seeking out licensing arrangements with companies establish in other channels that do not compete with ours: dress shoe companies.” To the investor, that seems like a logical extension and comes off smart because the sports shoe company realizes their strengths and is selling that to the unrelated channel.
FYI, Nike is the sports shoe company. They sold the technology for Nike Air to Cole Haan (a dress shoe company). Cole Haan has a Nike Air line, which are essentially Cole Haan shoes with a Nike Air insole. It is sold under the Cole Haan name at Cole Haan stores. You cannot walk into a sports shoe store and find a Cole Haan dress shoe. The salesperson may know about it, but only bring it up if asked. They would direct you then to a Cole Haan store.
In conclusion, the entrepreneur needs to pick the focus of the company and market that in the primary channel. If there are multiple channels that are related, then they could still market their product. However, for truly unrelated channels, they need to very wary. One answer is to partner with another company, letting that company sell their product under the other brand name.
Job Seeker Focus
Posted by Steve in For Job Seekers, Pitch on April 21, 2009
In the first post of this blog, I wrote about focus. One of the hardest actions for an entrepreneur to do is focus; and the same thing goes for a job seeker.
Most people are not good at just one thing, they are good at several things. I find it amazing that while everyone realizes this, HR people and hiring managers seem to forget it. Or do they?
The answer is that they do not forget it, but know that a good employee has many facets. The key is to be able to focus on the job at hand, and on the company that employees them. If the person cannot focus on their own job search and the primary skills needed for that job, then (as the logic goes) how can they focus on the employer? The answer, unfortunately, is they cannot.
Successful job seekers realize this. They deliver a focused message to one market…and sometimes a slightly different message to a different market. The same thing goes for the entrepreneur and how they sell their goods. A defocused marketing message can kill the product.
So, whether you are looking for a job, or looking to sell your product think about your audience and what the expect, need, and want. Then sell that, and only that. The extras are nice, but not what they are buying.
Business cards – Have them.
Posted by Steve in For Job Seekers, Pitch on April 17, 2009
There is one “must” for business cards – have them.
If you have really good cards, then you can stop reading. Otherwise, continue. You may still want to continue reading just to make sure…
This is another case of writing about the completely obvious but it needs to be said. There have been many times that I encounter people making business card mistakes. Years ago when I started out, I did some of these, and learned the hard way.
Whether you are an entrepreneur or a job seeker or an investor, or whatever, please have a business card. They are very inexpensive these days to get decent ones.
The rest are suggestions.
Do-It-Yourself: No.
Unless you are truly broke do not make them yourself. Avoid looking cheap. It is almost impossible to get the right kind of paper stock and to cut them properly. The designs often look unprofessional, the ink does not present correctly (bleeds, too feint, dots are visible, etc.). It can give a bad impression of you and your business. The exception is when you have no other business card available, and then it is okay to make your own. Keep it simple though.
Size: Standard size is 3.5 x 2 inches.
Keep them the standard size, no larger or smaller. Larger cards do not fit easily into pockets, wallets or the business card case. They usually get tossed out. Smaller cards are very popular with this one online business card web site. Most people use them because the first 250 are free. It may seem like a great deal except that on the back they advertise the free cards on the web site. That is usually not a big deal, but when you are trying to stand out from the rest of pack, its best to go your own path. The only exception is if the smaller card is smaller because of a design reason that makes you unique.
Design: Get professional help or keep it simple.
Unless you are an artist, can use the branding of your company, or can do decent design, then keep it simple. One of the best ways is to use the design platforms on business card websites. You can choose a stock background and a text layout. Then, you fill in the data for the layout and you are done.
Thermo graphic or Printed: Either is fine or depends on your business.
Thermographic limits you with colors and can get very expensive as you add more colors. Thermographic does provide a nice tactile sensation. Printed gives you any design, but the challenge is to get a decent design. Once again, web sites with design programs can provide these layouts.
B&W or Color: Whatever you can afford. Ideally, if it is a thermographic card then Black and White is fine. Otherwise, look for a color card.
Matte or Gloss: It depends on the design but I recommend that one side is matte.
You cannot write on gloss, and in spite of some cultures viewing that as rude (i.e. Japan), the American culture is okay with you writing on their card. My card is one side gloss and the other side matte. People get annoyed when they cannot write on the card.
Square or rounded corners: Use what works for the design.
One side or two sided: Use what works for the design.
Where do I get my cards made?
Print Cards: www.overnightprints.com
It has a great design program but you can upload your own design. The prices are very reasonable. For $50 dollars you can get 1000 double sided full color cards that are the standard size, and a little thicker than other cards (so they stand out). The design can also go to the edge. I ordered several times from this company.
Thermographic: Office Depot, Office Max, and Staples or www.americanstationary.com
My wife recently found www.americanstationary.com provides decent thermographic note cards (we ordered the 4×6 for me). On their site, they advertise “calling cards” which are essentially the same as business cards. I have not ordered them, so if anyone has please let me know.
What should I put on the card?
If you do not have a specific product or job yet, then make a simple card with your name, phone number, and email address. You should add your field of expertise and you may add qualifications and a mailing address.
Conclusion:
Remember, you want to leave a good impression, get the other person’s card, and give them your contact information. Having business cards is essential, and unfortunately, so many entrepreneurs starting out do not get them
The Hand-written letter
Posted by Steve in For Job Seekers, Pitch on April 15, 2009
When was the last time you received a hand-written note in the mail?
It has probably been a while. Yesterday, I wrote about the follow-up letter content. Most people assume that you would send that in email. You do. Some people also send it typed.
I send my follow up by email because it is faster and expected these days. I also send a small written thank you note. I purchased stationary (4 x 6 cards with my name on them) and envelopes (with my address on them). If you do not have stationary, just use regular paper. I use the cards as thank you notes for many things. It does not take more than a couple of minutes to write out the note, and then address the envelope by hand.
Writing an email is very convenient and everyone does it today. Sending a letter is rarer, but the most rare of all…sending a hand-written note. It is so rare that people get hand-written notes these days they seem to take particular pleasure in it. People do appreciate it and remember you.
BTW, I learned about it in the Rites of Passage book by John Lucht. Lots of great ideas in there.
The Follow-Up Letter
Posted by Steve in For Job Seekers, Pitch on April 14, 2009
One of the hardest skills to find in people today is good follow-up. When you demonstrate to your future employer or funder that you have the best follow-up then you will stand out.
Whether you are seeking investment or a job, the follow up letter after you meet someone is most crucial. How do you write the best follow up letter?
Make it short.
- Express your interest in the job or getting the funding; but only if you really want it.
- If it is a job then remember your theme – reiterate the key strengths that you would bring to the job. If any revelations occurred during your discussion then repeat them here. Attach your resume.
- If it is funding, then make it shorter by attaching your executive summary. Let the executive summary stand on its own.
- Leave it with an action that you will be in touch in a week.
Send it within 24 business hours of your last discussion. Show them your good followup. However, if you do not send it in 24 hours, send it as soon as you can. Any follow up is better than today’s average: No Follow up!
As you can see, a follow-up letter works in the same way for the entrepreneur as for the job seeker. The elements are the same: reiterate the good impression, show them that you genuinely want to help them achieve success.
How can studying about investors and entrepreneurs be used?
Posted by Steve in Execution, Introduction, Pitch, Plan on April 13, 2009
Part 3 of 3.
Two weeks ago (Monday March 30, 2009), Bart Kemper asked how he could use this blog if he was not seeking investments or investors. Then and last week I pointed out:
1. I strive to provide information that in the right setting can open up more opportunities leading to more clients.
2. The information can be used to prepare the company for a merger, acquisition, sales, or other type of owner exit. All these elements make the company better and look better.
The third and final point is even simpler.
Just because you are not looking for investors does not mean you should forget about a business plan, or not have a good pitch, or not have a good strategy.
The idea is not to make the company just look better. It point is make the company actually be better, and to be able to effectively communicate that to outsiders. The 14 points are there to provide a guideline on the real qualities of a business that makes the business successful.
Each of these 14 points is not just useful for getting investors, but they are useful for growing the company. I will be writing not just about the high level stuff but also the low level details. How do you write a business plan? How do you write an executive summary? What are good interview questions?
For example, how could you use a well designed elevator pitch?
- Get investors.
- Get clients.
- Get a job.
Everyone at some point has been in a room where the audience is asked to each stand up and say something themselves. Most people are unprepared and give a rambling 20 seconds. There is nothing like standing up in this crowded environment and delivering a very clear, concise, and punchy elevator pitch. People will remember you. It will open up doors.