The Cook’s Tour of Your Premises


At the conclusion of your first investor presentation, the next step is to invite interested investors to visit your premises.  This is usually the first of at least two visits.

 

Ben Killerby

 

Being the first visit, it is usually a high level overview.  Investors often bring an expert with them, so you will often be meeting this person for the first time.  Don’t make the mistake of thinking that this person has been briefed to the same level that your investor has.  Take the time to address them personally, give them the Company Sentence, the Elevator Pitch and hand them the One Pager.

Given that a more detailed visit will occur later, the purpose of this first tour is to:

  • Keep the sales journey moving
  • Clarify any questions that arose in the first pitch meeting
  • Show the investor:
    • The business is real, functioning and organised
    • The CEO has the qualities needed for the business
    • The management has the qualities needed for the business.

How to Prepare for the Prospective Investor’s First Visit


Investors seem to allow 55 minutes for a tour.  This means you need to get straight down to it and allow yourself enough time at the end of the session to talk business.

  • Tidy up. Someone once said, “Drive twice around the car park to make sure the cars are parked neatly.”  What this means is that it matters that the premises are neat, tidy and well organised.  There must be no clutter, dirt or unprofessional behaviour.
  • Have a tour script and coach your people: Write down how many minutes you are spending in each department on your tour.  Don’t go over 45 minutes in total. You need at least ten minutes in the boardroom afterwards to gauge their interest and close on the next step.  Let each of your people tell the investor what their job is and how they do it, but don’t let them bang on.  Maximum is two minutes each.
  • Give a demo: Show them the product in action.  Show them customers logging on or buying things.  Don’t forget: the demo must work! Set it up days beforehand and test it, test it, test it and make sure it works on the day. If you are giving the demo and you don’t usually operate the program/machine/product, then get the expert in the company to give the demo.  I hold my head in my hands each time I see an otherwise capable CEO fumbling with their own product and saying, “It should work when I do this….”

The Cook’s Tour is for the prospective investor to make a decision about the CEO, the key management and the systems.  They are looking for the following:

  • Integrity
  • Positive attitudes
  • Entrepreneurship
  • Adaptability
  • Commitment
  • Expertise in the field
  • Great team dynamics.

The key points to convey about your business and the premises are that they have the right product in the right quantity.  You need to convey that they can carry out production cost-effectively, deliver or install the product on time and do all this at an acceptable level of quality and reliability.

 

Introducing the Staff


Investors at this level are backing the jockeys, not the horses.  So they usually want to speak to everyone, at least in the initial funding rounds. Key staff need to be introduced to the investor and then they need to explain their role at the premises with a two minute overview of their job.  The danger is that staff are so enthusiastic that they want to talk for half an hour.  Don’t let them. Your investor might only have 55 minutes to do the tour and talk to you afterwards.

 

How Investors Think When they Tour Your Premises


Investors will stop along the way and ask questions of the employees to gain an understanding of the types of people needed to make the business run. Tell staff to answer questions with no more than a one minute answer. It is not that you want to muzzle people, it is just that you have to keep the whole show moving.  You don’t want to run out of time at the end of the tour when you should be talking turkey.

 

Investors will absorb a lot of visual information along the way about the business. Inevitably, they will:

  • Read notices and posters on walls
  • Go off the tour path to look for rubbish such as disposables, scrap, broken machinery or tools, or rejects hidden in corners
  • Ask questions and demand immediate substantiating evidence
  • Look for smooth work flow, observe the state of repair of the equipment, observe whether the work areas are clean, tidy and without rubbish, material or waste overflowing.

They will absorb intangible qualities on the office or shop floor, such as:

  • The levels of controls
  • Discipline
  • Systems compliance
  • Corporate culture
  • Quality consciousness
  • Worker motivation
  • General happiness levels.

Conclusion


Investors will want to find out whether you and your team are the sort of people that they can work with for the next three to five years.  Give them the opportunity of deciding that they can by showing them how good your operation is day-to-day.

 

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