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Day 24: Present to an External Audience

TODAY'S PROMPT:

Decide what sort of people you are going to need to "sell" your idea to. Write these groups down, and put them in order of most important to least important. Starting from the top, work out how you'll find and get in touch with these sorts of people and what format you'll need to use to communicate your ideas. If you aren't sure of the right format yet, don't worry – it's far more valuable to work out who it is that you need to communicate with.

Today's topic is selling.

Nowadays, and especially amongst the more creative portions of society, "selling" is a bad word. It's associated with 1980s greed, money-grabbing and nefarious practices like unsolicited cold-calling.

In fact, selling is far broader and much less "greasy" than that. Selling is the core of your business – it is the ability to sell your idea and get people on board with what it is you are doing.

We've talked about the elevator pitch – we've even worked on refining it and make it more focused. The elevator pitch, that one- or two-sentence "what I do," is the essence of the sale.

If your elevator pitch works, then the more extended formats discussed today will also most likely work. Getting that core idea – that core sale – nailed down is much more important than the pitch format itself. Keep this in mind as we go forward.

The variety of selling formats

There are as many formats as there are customers. Remember again that we are talking about selling an idea, so the customer here is just the person you need to convince.

Some examples of “customers” when pitching a sale:

  • investors – sell investors the concept of your idea, your team, and the belief that they'll be able to profit by investing in you
  • bank loan officers – sell bank loan officers on the fact that you'll be able to pay the interest on your loan and one day even pay back the loan
  • potential partners – sell potential partners the idea that your project is worth their precious time and energy
  • retail partners – sell retail partners on your product so they are willing to give you precious shelf space
  • arts councils/charities/government grant giving agencies – sell them on the validity and worth of your project above everyone else's

Notice here that we haven't included "customers" in the usual sense of the word: those people who hand over cash in exchange for your product or service. That's because we want you to focus on the wider sense of "selling" – getting people on your side and agreeing with you rather than necessarily handing over cash. That will come (if that's the goal), but the money transaction part of the deal is relatively simple once you have "sold" your idea to the aforementioned subjects.

Daniel Pink's book "To Sell is Human" talks about how nearly everyone nowadays is a seller. His definition of a seller is simply "someone who persuades others to take action."

There's a useful summary of Pink's ideas in his YouTube video[1].

Selling, then, is simply the act of getting someone to agree with what you are doing and act upon it. Depending on who it is you are trying to persuade, there are a number of different expected formats.

The formats we will cover today are:

  1. Email
  2. Pitch deck
  3. Business plan
  4. Website

 

Email

You will be reaching out to a lot of people via email. It's the go-to method of first contact for a lot of people today. Getting someone's number and calling them out of the blue is considered somewhat intrusive, but tracking down their email is more acceptable.

On that note, www.hunter.io gives you a powerful tool for working out emails of people in certain companies. It plugs straight into LinkedIn and can be used to guess and verify email addresses of the people you want to get in touch with.

If you are contacting someone out of the blue via email, keep your message short. Don't waste the recipient's time with a long-winded email. Instead, deliver your "sell" very quickly, and give them details about what it is you actually want. Provide your contact details and website. KISS (keep it simple, stupid).

If your sell is strong enough and you are contacting the right person (i.e., someone with whom the "sale" will resonate), then they'll get back to you.

What is the sell here? Well, it's your elevator pitch – which you've been thinking about and refining these last few weeks. Your one or two sentences at the top of the email will be enough to make the sale if they’ve been refined enough to be interesting to the person you are contacting.

  1. Pitch Deck

A pitch deck is slightly more complicated than a simple email. This is a fancy term for a PowerPoint presentation. It can be a few sheets of paper (or a PDF of PowerPoint slides) with details about the business.

Generally, sending the pitch deck directly to someone (unsolicited) is too aggressive. No one wants to receive an unsolicited 20 MB PowerPoint in their email, and very few people like having a heap of documents thrust into their hands. The pitch deck will instead be a next step for someone who is interested in learning more about the business (potential partner, investor) after you have already connected with them.

In terms of length and detail, there are varying schools of thought here. Some people say the shorter the better. One page if possible – if you can sell your idea in one page, then you don't need the rest of the fluff.

For certain audiences, you'll need more detail. For example, if you are pitching to investors, you will usually include…

  1. The basic idea
  2. The team
  3. Some basic financials
  4. What you want from them to move forward

Other "experts" suggest much longer 20–30-page pitch decks. At this point, it's becoming more like a business plan (the next step).

The length and detail will depend entirely on your audience. Who is it you are delivering this document to?

If you aren't sure, then – shock, horror! – ask. Just ask what sort of detail they'd like to see – "broad strokes or all the nitty gritty?" Most people will tell you what level of detail they'll need. They'd much rather get something that they can easily process.

  1. Business plan

A step up from the pitch deck is a full business plan.

There are whole business classes about this subject, and there are specialist consultants who can help produce them for you. A business plan is required when you are raising money – either from investors (in exchange for a part of the business, normally) or from a bank or other money-lender (in exchange for you agreeing to pay back the money with interest on top).

The meat of the business plan, and what really differentiates it from a pitch deck, will be a more detailed financials section. The business plan will include all of the content already in your more basic pitch doc AND these more in-depth financials.

This financial section should include your business model, expected revenue and costs, and your profit projections for the business. This will probably be at least the next five years of projected growth.

How on earth are you meant to know this? Well, truth be told, you can't. And the people reviewing your financial projections will know that you can’t. They don't expect the numbers to represent real specifics. Instead, they want to see that you can sit down and work out the basic logic of your company's growth and highlight the assumptions you are making at each stage. If you can state assumptions honestly and clearly, then at least you are showing you are financially reasonable. This, in turn, suggests how well you'll handle the money when you actually have it. On the other hand, if your projections and assumptions are ridiculous, then you'll be less trusted to handle the investor or bank’s money.

The purpose of the business plan is to show that you can reasonably anticipate the risks inherent in the business and deal with them sensibly.

Do you need a full business plan?

Unless you are seeking funding early on, I would say no. Instead, it's better to expend energy working on the business itself, not a paper version of the business. By actually getting your product/service in front of customers, you'll be in a much better (and realistic) position if you ever do decide to create a business plan. You'll be able to point at real transactions to show your revenue/costs rather than simply making assumptions.

Early on in your business, you have limited time and energy. Much better to spend that limited resource on the actual business rather than a business plan. This is contrary to what a lot of business guides will tell you. It's more in line with a business "philosophy" named the Lean Startup.

The core of Lean is to assume you know nothing, test everything, scrap what doesn't work, and keep what does. Fascinatingly, this is captured in the Bible (1 Thessalonians 5:21): "test everything; hold fast what is good."

This is exactly contrary to the ideas behind business plans – in a business plan, it is assumed that you can plan out what is unknown and stick to it. This can be disastrous, akin to following a map of the land that's 50 years old and doesn't include a recently opened fissure in the earth. Or following military intelligence that's a few days old and stumbling into the middle of an enemy camp that "isn't meant to be here." Instead of blindly following a plan that we made up, it's healthier to assume we don't really know anything and to keep testing.

When do you need a business plan, then? If you are going to investors or a bank, you will likely need a formal document to give to them. Thankfully, there are many excellent online resources that make the process relatively painless!

Conclusion

Regardless of the actual format you are using, the basics of selling your idea are the same. It all comes back to your one- or two-sentence pitch. If you can nail the elevator pitch, then the rest will come easily. People struggle with pitch decks and business plans because they aren't quite sure what the core of their idea is. So, focus your energy here, and the rest will come.

[1] Pink, Daniel. Video: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&sqi=2&ved=0ahUKEwi7u_XWmvTQAhVkDcAKHUSIBgEQuAIIRjAD&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DJ6EjBwrdHgE&usg=AFQjCNHcDxMlTj9IhqzPraGue8EuWq3Q6A&sig2=nunVjKtymM7Zg6kGIlkk1w&bvm=bv.141320020,d.ZGg. 27 Jan 2017

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