Question

The government of Ghana, through the Ministry of Trade and Industries (MOTI) has called for Business Plans from all “Year 2020” Ghanaian graduates of tertiary institutions across the country to access a seed money for setting business through Stimulus Package known as the COVID FUND. It is important to note that the Fund Managers require applicants to show proof of how feasible their plans would be. This implies that you are expected to explicitly show how and when the venture would pay back the investment, at what point would the venture break-even as well as the opportunity cost of your venture (e.g. Time Value of Money (TVM) like NPV, BCR & IRR). Fortunately for you, after a semester’s course in Entrepreneurship, you have learnt about how to write a pitching business plan. How would you go about this onerous task?

Answer 1

While preparing a business pitch, an entrepreneur has a lot of things on mind including the awareness of the audience he is presenting to, the real life relevance to the problem he has identified, extensive detailing and most importantly, the numbers! Yeah, an investor who has propensity to fund your startup has the right to know every little fact, let alone it is needless or not. So, it is an arduos task to get the numbers to be impressive without manipulation, i.e. numbers must be accurate though it might not catch the attention of the investor. Well, that's the very reason you're standing before them to pitch. You gotta sell the idea.

Primarily, the numbers need to be realistic and defensible and if you are pitching the plan, you have to be readily prepared for in-depth grilling relating to the projected numbers. By numbers we mean anything. Expected turnover, breakeven point, Net Present Value, Capital inflow in the intial few years, etc. form these 'numbers'. While the projections you are showing them might be well formulated and conceding with the trendsoin the economy, any average investor will be keen on seeing concrete evidence supporting your claim.

Assume that your company is already in the market, and you have come to pitch for additional growth funding (Shark tank scenario), the investors will be keen on your past turnover, net margins, the growth rate of the compan, etc. And it's pretty legitimate to know these facts from an investor's point of view, for how will they gauge the risks. In a case wherethee performance of the company is below par, you need to substantiate on why did that happen in the first place and how the funding from their side will address this issue. Sounds arduous right? Well you gotta work hard to run a company.

On the other hand, if your company has not entered the market, due to the risk increase the investors will shift focus on supporting evidence that justifies your predictions. In simple, it's a matter of how you sell the idea at the end of the day.

Hope this helps. Do hit the thumbs up. Cheers!