The Problem / Pain You are Targeting in the Market
Articulate the specific problem, pain or demand that you are targeting clearly and concisely and expand into supporting research when appropriate. This is the next logical expectation of an investor listening or reading to your proposal.
It seems quite obvious to have to state as I write it here, and probably to you too. But the honest truth is that a lot of “opportunities” when presented don’t do it clearly enough, nor do they recognise that there is logic attached to the order in which an investor approaches the assessment of an opportunity.
If the problem that is being solved by your company doesn’t get articulated well, we as investors are torn between either concluding there is not a sufficient problem / demand out there, or that you haven’t done your homework. And further if it comes before your explanation of what you have created, then the whole proposal is about face and will not get the level of engagement from your investors to the extent that you could.
I would like to see that the problem is one that a large number of consumers will be interested in paying for that problem to be wiped from their worries, or otherwise will want it because there is likely to be powerful demand for it. Then again, the problem only needs to be big enough for your venture to be viable – ie offer sufficient return to you and your investors to be worth the risk. In some cases there doesn’t need to be a market that is worth billions. Just enough to make commercial sense.
Here is an example in the housing sector:
“The company” has uncovered research that highlights a severe shortage of affordable housing for the retiring demographic. There are expected to be x million people retiring in the next 15 years, with barely sufficient superannuation to cover living costs never mind the costs of housing. Further government support is unlikely to fill this gap. The company has a developed a solution that seeks to provide an affordable solution to fill this gap”
The key with outlining the problem is to drill down into the opportunity to a greater extent to articulate the nuts and bolts of the commercial opportunity. Investors like this and will feel that the proposal is on track!
Referring back to the previous example of the fuel saving technology, the problem could be articulated in terms of the average business or family being exposed to higher fuel costs, environmental threats and in general meeting the needs of a society that is demanding greener solutions for everyday life.
So far we have articulated what you are looking for, what the broad opportunity relates to and the specific problem that you are targeting. Look out for the next critical ingredient – The Solution.
Try our Pitch Coaching, Business Plan Litmus Test or Strategy Coaching for a fast track insight to whether you proposal or your opportunity is on the mark, and what you can do to improve it. Contact us if you are just out of time and wish to have us prepare your Business Plan for you.
