MEI610 Study Guide
Unit 4: Selling Your Idea
4a. Analyze best practices in business plan writing
- What is the main purpose of the first stage of the business plan?
- How might an entrepreneur make the business plan as realistic as possible?
- What components should be completed in the last stage of the business plan writing process?
The stages of business plan development consist of the following:
- helping the business plan writer get started on the plan;
- developing a reasonably complete and comprehensive first draft of the plan by focusing on developing the initial story without obsessing about its realism;
- converting that into a second draft by adding realism to the plan; and
- developing a third draft while preserving realism and making needed changes designed to make the plan appealing to the entrepreneur and desirable to targeted investors.
The goal of a business plan is to make it as realistic as possible. When the first drafts of the business plan are written, assumptions are usually made about sales projections and other data. An entrepreneur will finalize their plan, replace assumptions with factual and expert information, review and revise sales projections, adjust strategies needed to make projected financial statements realistic, and ensure that the written and financial parts of the plan are synchronized.
The final stage of the business plan is to finalize major goals, write the executive summary, and polish the plan to ensure it has no errors. Next is to write a letter (or email) of transmittal, which essentially will introduce the plan, similar to a cover letter with a resume.
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4b. Formulate business idea pitches, including slide decks and elevator speeches
- What should an entrepreneur focus on when developing the presentation for investors?
- Why should you focus on why your business solves a problem?
- What is the formula for an elevator pitch?
To develop a successful business plan pitch. A pitch is a brief and persuasive verbal presentation that outlines the key points within a business idea, usually in an attempt to get investors. It is important to avoid telling too much about how the business works and instead focus on telling them what they need to know to gain interest in investing in your business in your pitch. Some things that should be considered in the pitch include describing the market problem and how your venture solves this problem. Also, explain how and why you can solve their problem and how you can do so in your proposed business. Also, consider why you need financing and why they should invest.
As an entrepreneur, you need to effortlessly discuss your product and its problem-solution narrative, its value proposition, its market niche, and the competition. However, in your pitches, you must also be able to tell your story. This is often done in a fairy tale format. Different approaches are used, depending on the audience.
An elevator pitch is a short statement about your business. Its format includes introducing yourself, briefly summarizing what you do and how your business solves a problem, and providing a call to action or an opportunity for follow-up.
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Unit 4 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- elevator pitch
- pitch