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Last Updated on November 8, 2022 by Arif Chowdhury
Every company entrepreneur understands the value of a solid first impression. Entrepreneurs must market their concepts, business idea, or products to consumers and potential investors at various stages of a company’s lifetime. But do you know how to pitch an idea to a company and get paid?
You will never anticipate when a discussion may offer you a bank check regarding 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 corporate investors.
You have to remember; these are on a different levels. 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 present a business idea on paper. But, even if you don’t intend to seek financing, a solid elevator presentation demonstrates that you understand your company a to z, which will be helpful if and when you choose to seek funding.
How to pitch your business idea smartly?
A comprehensive business strategy is the 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 investors.
Consider taking enough time to prepare your pitch deck beforehand. A successful pitch requires careful preparations and planning. 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.
Most 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 halfway through your presentation. Practice enough to rehearse, simplify your message, and retain the aspects contributing to your company’s success.
Recommended Reading: 6 Best Business Plan Software for Startups (Tested and Reviewed)
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 on how to solve the market issue to gain the 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 precise about your goods and price, and stress how eagerly your market awaits your presence.
Recommended Reading: Which is the Best CRM for Startups? 12 Best CRM Tools (Reviewed)
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. Showcasing your experience and business opportunity will amaze the investors (potential clients, possible revenue stream, vital strategic points, etc.).
You’ve probably discussed this before, but now is the time to build a whole picture of your company.
Quick Note: Before starting a business, you need a great idea and a proper plan before looking for venture capital from potential investors. Your business plan is intellectual property. Thus, make it secure. Use Creately to prepare for your business milestone. It is easy to use, and no prior experience is needed.
8. Craft a complete marketing plan from scratch.
Perhaps this component of the investor presentation and a complete business plan is often overlooked. For example, how will you communicate with your target customer? What will be the expenditure on 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 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 your team may lack. 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 are 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 them; thus, double-check your data before starting the presentation.
11. Identify your significant 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 is 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 to 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 clarify that 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 funds, such as above $1 million. Are you looking to be funded?
Then, demonstrate that you’ve done your homework on this exit plan, including the businesses you’re targeted and why it’ll make logical sense several years ahead.
Quick Note: You should evaluate a strategy frequently to confirm it meets the company’s needs. As the company grows, unexpected issues will arise, and old issues will lose significance.
14. Refine your business plan with constructive feedback.
Look for ways to enhance whether you get money, another discussion, or a refusal from your presentation. Feel free to request criticism and incorporate it into your pitch the following time.
On the other hand, only press the issue if the client is willing to give any. It’s their time you’ve already used and is asking for more, so striking the right balance is difficult.
You may have the basic idea and instructions for pitching a business idea in 5 minutes. But, to make it work, you must 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 at a university. Instead, you are about to impress a group of highly experienced people, which takes work.