How to pitch a business idea
By BBC Maestro
Time to make that business idea a reality? As an aspiring entrepreneur, sooner or later you’re going to have to pitch your business idea to investors.
But what makes a good business pitch? How can you make a great impression? And are there any tricks for winning over investors? Read on to find out how to pitch your business idea, with insights from British entrepreneur Peter Jones’ BBC Maestro online business course.
What to include in your pitch
In a nutshell, your pitch should explain your business proposition, your growth strategy and what return on investment your potential investors can expect.
First and foremost your pitch should tell a story. What is your product or service, and why do people need it? Define your value proposition. What problem do you solve for your potential customers?
If you’re entering a crowded marketplace, make sure you can clearly explain how you’re bringing a solution to the market that’s sufficiently different from your competition.
Include information on the size of the market, your marketing plans, what you’ve done so far to determine product-market fit, and what size of capital investment you require. Always back up your points with research, data and facts.
Additionally, include information on your exit strategy. Do you plan to sell the business? Merge the company? Or go public? Including your exit strategy shows you are forward-thinking and seeing the big picture.
You should also use visuals to bring your pitch to life. While spreadsheets and charts are important, striking visuals can help your investors engage with your pitch. You could also use positive real-life case studies of ways your product or service has already been used by your target market.
Remember, you are part of your business’s story too, and investors tend to buy into the person pitching equally (if not more so) than the business idea. So why did you start the business? And why should they choose you? Make this clear in your pitch.
Preparing for your pitch
There are a few steps you can take pre-pitch to make sure you deliver the best possible performance on the day.
Practise, practise, practise!
“Practise your pitch in front of a mirror until you know it by heart, and it is word perfect,” says Peter. “Ideally, then practise it in front of your mum, your partner, your best friend – in fact, anyone you can rely on to give you honest feedback.”
Practising your pitch in front of others will help you gauge whether people understand your business - do they get it straight away? Or do you need to work on your elevator pitch? You must be able to explain your business proposition clearly and succinctly.
Peter also recommends filming yourself when practising: “Record your pitch, then play it back to yourself and critique it.”
Do your research
It’s also a good idea to do some background research on the investors you’re going to meet with. Find out who you’re pitching to. Who have they invested in before? Are they experienced in your industry? What stage of business do they invest in? What successes have they had previously?
Delivering your pitch
Now the big day has arrived, here are some tips to deliver a killer business pitch.
Make a great first impression
“That first impression is crucial. It’s a lasting one,” says Peter. “You wouldn’t arrive at a loan meeting with your bank manager dressed in ripped shorts and flip-flops unless you’re trying to sell a surfing business.
“I’m not saying wear a suit, I’m simply saying dress appropriately to your audience and give them the ‘real you’. Give me an impression of who you might be. Are you going to be reliable? Do you really care? And if you don’t care, why should I care? Why should I invest in you? People buy people first.”
Even if you feel nervous pitching, remember the confidence you have in your business idea and use this to add passion to your pitch. So have faith in yourself.
“When I have to do a pitch, I try to get to a place where I relax. And I know that sounds easy, but if I know my business - I’ve got nothing to worry about. I know my business better than anybody. I enjoy talking to people about my business,” says Peter.
Know the details
Be prepared for questions and remember to be honest with your answers. Unlike what you see in the movies, very few people can blag their way to an investment. Your business plan must be solid, and you should know it inside out.
“Eat, sleep and breathe your financial forecasts and the main points in your pitch,” says Peter. “This will make the difference between success and failure when trying to secure an investment deal.”
Take feedback on board
Even if you don’t win the investment you are pitching for, be sure to take any feedback from the investors on board. Learn from their experience and be gracious for any advice they give you.
“Even if an investor chooses not to invest in you, it’s a great opportunity to get some feedback from experienced businesspeople,” says Peter. “How your pitch was, where you went wrong. Then you learn from it. Be positive about it. Thank them for their feedback, really appreciate it.”
Pitching for investment is a uniquely nerve-wracking part of your entrepreneurial journey, yet it’s also a necessary one. Make sure you’re well prepared to talk the talk and walk the walk, with Peter Jones’ expertly crafted online course, Toolkit for Business Success.
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