Editor’s note: Bill Warner, entrepreneur and investor, is guest contributor to The Skinny today.

RESEARCH TRIANGLE PARK, N.C. – Having worked with hundreds of business owners to help them put together effective business plan presentations, I often get asked about the things that can go wrong. They are interested in knowing what the major pitfalls are that could cause a disastrous result when presenting their business plan. Here are five of the most common shortcomings that could stand in the way of effectively communicating your business stories.

Incomplete Story

Many presentations omit one or more areas of information, causing the audience to question whether the business owner actually understands their business. By having a complete story, you show that you know what they need to know.

The story line has to be a logical flow that demonstrates there is a:

• Compelling opportunity and attractive solution

• Large and growing market with well understood buyers

• Competitive product that meets the buyer’s needs

• Workable marketing approach

• Viable path to sales traction and revenue attainment

• Management team that can execute

• Solid financial forecast

• Great deal for investors

The pit you don’t want to fall into is getting this logical flow out of sequence and out of balance. Many presentations I see spend far too much time on one topic and not enough time on the rest of the story. This form of myopia will produce an unbalanced story that leaves out the other important business aspects of your plan. Make sure you cover the while story and with enough detail and emphasis that demonstrates that you have a handle on all aspects of your business.

Weak Management Team Description

One of the most important parts of a business plan presentation is the description of the management team. Too often this part of the presentation is given superficial thought. The management team has to include the right people to actually execute the business strategy and plan, and achieve the expected business results. Show that you have the right people to do the job by pointing out:

• Their management and leadership experience

• The prior business results they have achieved

• Their relevant company and industry experience

• The strength they bring as a team that is working well together.

If you are presenting to investors, this section of your presentation may be the most important one. Think about it. The investors will be banking on you and your team to manage the investment they will be making in your company and to successfully execute the plan. They need to be convinced that you and your team can do this. If the right management team is not shown to be in place, investors will not invest and employees won’t join the company.

Missing The Essence of the Opportunity

A very common issue is that the business owner is overly enthralled with their solution and wants to tell you every nuance of it. I sometimes find myself buried in details that are probably quite important, but don’t add a lot more information about the attractiveness of the business. I see this mainly with technology and life sciences businesses whose founders are the founding scientists.

It’s important to explain the opportunity you are going after, in business terms and from the perspective of the buyer of your product or service. It is important to get across:

• The market problem you are solving

• How big a revenue opportunity there is for a solution

• That the buyer sees it as an important problem and will spend money to solve it

• That you have a distinct competitive advantage

• The compelling benefit that the buyer will receive

• How you will get the solution to market

All the information about the product or service should then simply demonstrate that the buyer’s need is addressed and that it will win against the competition. How the product or service works is less important than how well it addresses the buyer’s need.

Lacking An Effective Marketing And Sales Plan

A critical mistake is when the business owner who does a great job of explaining the opportunity, solution, market and competition, but falls way short of explaining how they are actually going to reach the buyer.
Most businesses that fail, fail because they do not reach their market segment. It is critically important to explain in objective and direct terms what marketing programs you are going to employ to achieve market awareness and generate qualified sales leads.

Don’t diminish the importance of marketing. It’s all about generating leads. There’s nothing stronger than being able to show how many leads you need to generate enough sales to meet your revenue objectives, and backing it up with a description of your pipeline with customer names and revenue projections.

You also have to knock this subject out of the ball park with a crisp explanation of your sales process. Then bring it to life with real examples of sales situations you are working on along with recently closed deals. There’s nothing stronger than being able to show sales traction with customers who have written you checks.

Don’t Explain The Deal

I see too many business owners who really don’t understand what financing they are asking for, what they are going to do with it, and what they should offer the financier. Business owners who are going for financing really should understand the fundamentals of the financial forecast and the dynamics of the financing transaction they need. You need to explain:

• How much money you need

• What the money will be used for

• What share of the company you are selling

• The potential return in the context of your financial forecast

• Your exit strategy

After all, it’s your business. If you care about the end result of your business, you better know what you are going to get out of it and what you are going to share with others.

Tell the Whole Story

Certainly there are many more ways that a business plan presentation can go wrong. The best way to avoid these pitfalls is to make sure you are well prepared with a thoughtful and complete story that you have practiced and are able to answer the many questions it will generate from an interested audience.

About the author: Bill Warner is the Managing Partner of Paladin and Associates, a business consulting firm in the Research Triangle Park area of central North Carolina, and is the Chairman of the Triangle Accredited Capital Forum, an angel investor network with over one hundred members throughout the southeast.