10 Business Plan Dos and Don’ts
10 Business Plan Dos and Don’ts
Insights from a judge at Harvard Business School’s Business Plan Contest
By David Ronick |
Each year, I help fellow entrepreneurs and investors judge the MBA business plan competition at Harvard Business School. This year, I noted which pitch approaches seemed to work best and which tactics fell flat.
Here are five things that worked in this year’s presentations—and that you should consider including in your next business plan pitch:
1. Bookends The best pitches started and ended with the same 30-second, crystal clear explanation of what was to come: The customers, their needs, the solution, and the amount of capital sought. That helped the judges process and remember everything in between.
2. Comparables At some point in most pitches, judges think to themselves, “Will this really work?” The best way to convince them is to show that you’re already getting results. If you are just starting out, another powerful approach is to cite real world comparables. For example, if your exit strategy is to sell your company to P&G, tell us how they recently bought companies similar to the one you are planning, for how much, and why.
3. Emotion Every student used logic. But the winners built on that logic with an appeal to emotions. Winners brought their arguments to life, using examples, stories, or short demonstrations. Judges could sense their passion, and imagine how their customers would feel.
4. Market Research The best competitors really understood their markets and taught us about them. They explained what parts of their industries were growing and why. That gave the judges insights and perspective, which helped us evaluate their pitches. Not to mention, it also gave us confidence in the teams.
5. Proof of Demand Last but not least, the best teams had clearly been out in the field, talking with and listening to customers. They shared customer comments, survey results, and data collected from interviews and test market campaigns. In short, they convinced the judges that customers wanted their products. There were also five business plan pitch tactics that the losing teams had in common—and that you should avoid:
1. Text Overload Great slides make complex ideas simple and abstract ideas tangible, using numbers, diagrams, or pictures. But for the most part, words in pitches are best when spoken, not written. So stick to writing the headlines and telling us the details.
2. Too Much Focus on Product We’re judging your business, not just your product. So don’t focus simply on what you’re selling. You should also keep in mind that you’ll probably wind up changing certain aspects of your product once you put it in front of customers and see what they think. So if your pitch is 15 minutes long, don’t spend more than two of those minutes on your products.
3. Passive Research It’s good to use some statistics in your presenation (e.g. “The market is growing at 10 percent.”), but reserve the details and sources for backup slides. Don’t base your entire business plan on quantitative research. Be sure to show that you’ve gotten out of the library and have gathered some qualitative research by talking to potential customers. “We interviewed 50 customers and they said…” carries much more weight than “A study showed…”
4. Overlooked Execution A start-up idea by itself is pretty much worthless; it’s all about the execution. The weakest teams underestimated how much time and money it would take to develop and tweak a product, or they outright failed to think through how they’d attract customers in a cost-effective, repeatable way. So be sure to spend time really thinking about and researching how to properly execute your idea.
5. Lack of Authenticity Stick to what you know and care about. One team pitched an idea related to parenting, but didn’t include even one story or picture of a child anywhere in their pitch. As a result, it felt like the team wasn’t truly passionate about parenting—even though that probably was not the case. Ironically, some of the best business ideas in this year’s competition rated poorly with the judges because they simply weren’t pitched well. It’s important to understand that pitch tactics can make a huge difference in how well your business plan is received. So be sure to take your good idea, and turn it into a great pitch.