Every company entrepreneur understands the value of a solid first impression. Entrepreneurs must market their concept, business idea, or products to consumers and potential investors at various stages of a company’s lifetime. But, do you know how to pitch a business idea in 5 minutes?
You will never anticipate when a discussion may offer you a bank check when it comes to obtaining investment money. As a result, entrepreneurs must develop a successful story that conveys the company’s worth regardless of the environment.
Before we get started, a word of caution, a proposed plan for an educational classroom presentation, or speaking in front of a general audience is not the same as approaching before the corporate investors.
You have to remember; these are on a different level. It would be best if you customized every presentation for each type of investor in question. In general, experts attract a diverse group of investors from various backgrounds. It’s fair to assume that the vast majority aren’t specialists in your business vertical. Therefore communication clarity is essential.
If you’re a company owner, you have to figure out how professionally you can pitch a business idea. Even if you don’t intend to seek financing, having a solid elevator presentation demonstrates that you understand your company a to z, which will come in useful if and when you choose to seek funding.
How to pitch your business idea smartly?
A comprehensive business strategy is a foundation for a successful business presentation. Then you must find out why your company is valuable and worthwhile to invest in. Perhaps you have proven successful financial records and a thorough study of how you compare to the competitors across various sectors, but you won’t get enough time to cover everything.
The reason is – you’ll get around 5 minutes at best to present your business idea when pitching to entrepreneur’s investors for the first time. Here’s how to make your fastpitch a hit.
1. Build a presentation that will convert investor
Consider taking enough time to prepare your pitch deck beforehand. Your target should be to make a simple portfolio to work with, which gets investors enthusiastic about your company.
The best practice is to prepare a 10-minute version and a prolonged one containing everything you’d want to share with prospective investors.
Quick Note: Canva is a free web application. You can build your business presentation within an hour.
2. Give rehearsal several times
It would help if you worked on your pitch. Because if you cannot rapidly communicate with each aspect of your company, every other suggestion on this list will be rendered worthless.
The majority of business owners believe that just understanding their company will enable them to communicate its value quickly and concisely. Furthermore, having a great business plan with glare graphics would suffice. But, as a result, they arrive at presentation meetings unprepared.
Instead of saying, “Within 5-minutes, I will explain everything,” and spending 5 minutes. You’ll quickly find yourself babbling for 30 minutes after only getting through half of your presentation. Practice enough to rehearse, simplify your message, and retain just the aspects that contribute to your company’s success.
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3. Present your business opportunity with a compelling story
Start your pitch by telling a captivating tale. It should target the market issue you’re trying to solve. It will immediately pique your audience’s interest. Also, if you’ve performed any market research, don’t forget to provide the results.
4. Elaborate how to solve market issue to gain customer
Share what makes your product or service unique, why customers will buy it, and how it will address the problem and provide a solution.
Keep it brief, simple, and easy to convey to others. Unless potential investors are highly acquainted with your sector, avoid utilizing phrases. If you’ve done any preliminary testing, provide the findings here to offer your idea more legitimacy.
5. Identify your target market
Consider who you’re developing your product and service for and divide them into TAM (Total Available Market), SAM (Serviceable Available Market), and SOM (Serviceable Obtainable Market) segments.
It surely will amaze your listeners, and also it will assist you in strategizing your roll-out strategy.
6. Plan a business model
This part of the presentation is usually the most important to investors. How are you going to earn money? Be extremely precise about your goods and price, and stress how eagerly your market awaits your presence once again.
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7. Showcase a long-term milestone
You want to establish credibility early in the presentation. Don’t forget to discuss the proven experience you’ve gained in your field.
In this part, you should trigger your own trumpet. If you can showcase your experience and business opportunity, it will amaze the investors (potential clients, possible revenue stream, vital strategic points, etc.).
You’ve probably discussed a little bit of this before, but now is the time to build a whole picture of your company.
Quick Note: Use Creately to prepare your business milestone. It is easy to use, no prior experience needed.
8. Craft a complete marketing plan from scratch
Perhaps this component of the investor presentation and a complete business plan is often overlooked. How will you communicate with your target customer? What will be the expenditure of marketing? What criteria will you use to determine success?
Your financial statements should make calculating your client acquisition expenses simple. First, however, you should explain how you plan to reach out to consumers, which channels you’ll use to advertise, and perhaps provide a sample of the message.
You’ve done your homework and know your target market, so why not demonstrate to investors what it means in practice?
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9. Identify your managerial team
Investors are more interested in people than ideas, so make sure to include information about your talented staff and what unique skill and experience they have that will be best suited to run this business.
Also, be careful to include any skill sets that your team may be lacking. Most beginning organizations are short on critical personnel, such as marketing, managerial experience, IT specialist, programmers, etc. Explain to them that you’re aware of it and you’re not an expert on everything.
10. Forecast future financial performance
Show how much income (per product) you expect to generate within the first month and after that. You must provide your assumptions to back up your statistics.
Experienced investors will check all the data you have given to them; thus, double-check your data before starting the presentation.
11. Identify your major competitors
This part is a crucial element of your presentation, and many individuals skip it or don’t give enough information about how they distinguish themselves from their rivals.
You should present this part of the presentation with the competitive matrix. It will demonstrate your competitors along with your business. Your business feature on the top, and with checkmarks, you showcase which kind of service your company provides.
It is the ideal approach to convey your marketing strategy over your competitors. To demonstrate your competitive edge, you should have check marks at the top for each category; this way, investors can see how you can gain an advantage over your competitors in the market.
12. A detailed capital requirement
Clearly state how much capital has previously been committed in your business, from whom, and equity percentages, as well as how much additional money you will require to advance your business. For example, do you need to raise funds in several rounds?
Make sure to clear that out in your presentation because you may not alter anything regarding the funding issue later.
13. Prepare plan B
Most shareholders will need to know your exit plan if you’re seeking significant amounts of funds, such as above $1 million. Are you looking to be funded?
Then make sure to demonstrate that you’ve done your homework on this exit plan, including the businesses you’re targeted and why it’ll make logical sense in several years ahead.
Quick Note: A strategy should be evaluated frequently to confirm it still meets the needs of the company. As the company grows, unexpected issues will arise, and old issues will lose significance.
14. Refine your business plan with constructive feedback
Whether you get money, another discussion, or refusal resulting from your presentation, look for ways to enhance. Don’t be scared to request criticism and incorporate it into your pitch the following time.
On the other hand, don’t press the issue if the client is unwilling to give any. It’s their time you’ve already used and is now asking for more of, so striking the right balance is difficult.
You may have got the basic idea and instruction of how to pitch a business idea in 5 minutes. But, to make it work, you need to practice and do your homework for at least a few days. So, prepare yourself and do some trials; otherwise, it may not work.
Remember, you are not giving a presentation in front of a general audience in a university. Instead, you are about to impress a group of highly experienced people, which is not an easy task.