On June 10th, the Colorado Denver SBDC hosted its second annual Trout Tank. Over 180 people attended to watch 4 aspiring entrepreneurs make their pitch to 30+ Lenders and Investors. The pitching entrepreneurs were given 5 minutes to make their pitch and then there was 10 minutes of questions from the lenders' group. The questions that were asked by the lender pool can give every entrepreneur some insight into what should be going in their business plan, what the lenders care about and what the entrepreneur needs to know about their business and industry.
Here are some of the questions that were asked:
First presenter was selling safety products on Amazon and their own website.
- Can you explain your inbound marketing strategies?
- What about your competition?
- What growth are you projecting for each of your product lines?
- What is the margin on each of your products?
- Currently you are totally online, what are your plans to move into retail brick 'n mortar stores?
- How is the company owned? (4 equal owners) Follow-up question- What is your method for breaking a tie?
- Do you offer a warranty?
2nd presenter's business model was a restaurant/bar featuring board games.
- What is your marketing plan?
- How is your revenue model going to play out in board games/food/drinks
- What is the estimated average food ticket?
- What kind and size of space are you looking for?
- How do you compete with the game console?
- How do you compete with the dining room table?
- What is the average length of table stay (table turn ratio)?
3rd presenter produced a food product that was currently on sale at grocery outlets.
- What are you going to use the requested funds for?
- How do you stand out from the competition?
- What are your margins?
- Are your projections including the funds requested?
- What is your production capability?
- Are the funds you are requesting going to be enough to meet your goals?
- What is the current growth in a) same store sales 2) new markets?
- If you are looking for an equity partner, what is the exit strategy?
- Do you have any ideas of how to increase your profit margin?
- Are you using Colorado growers for your product?
4th Presenter - Franchise Mobile Device Repair in Wal-Mart locations
- What is the price point for fixing these phones?
- Is not what you do in direct competition with Wal-Mart services?
- Walmart has a reputation for putting their vendors out of business. How will you prevent that?
- Can you talk about technology i.e. shatter-proof glass for cell phones?
- You are looking at 5 locations-what is your profitability per store and profit mix?
- What would I go to you rather than T-Mobile or another phone carrier?
- Since you are a franchise model - who on your management team has franchise experience?
You see some recurring themes here:
- Know your marketing strategy
- Know your competition
- Know your profit margins
- Know your distribution capabilities and licensing agreements
- Know your strengths, weaknesses, opportunities and threats
- Know exactly where you will spend the money requested and how it will move the business to greater profitability
Lessons Learned: Become an expert about your industry, the trends and the competition. Be able to explain your cost structure and profit margins. Most importantly be able to answer "Why the Customer will both Find and Choose You or your Product."