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It can sometimes be difficult convincing investors, banks, crowdfunding platforms, subsidy providers and customers. You can sometimes improve your chances of securing finance if you pitch your idea, business or plan in person.
Why pitching your idea is so important
A clear, concise pitch can put you and your product or service in the spotlight among potential investors. It can improve your chances of getting to talk to investors and in turn being funded.
The ingredients of a good pitch
A good pitch contains elements detailed in the business plan, only far briefer.
Once you've completed your business plan, you'll be able to answer the five questions listed below. These form the basis for a clear, concise presentation of your business idea:
1 Who are you?
- What's your background?
- What's your goal?
- What experience do you have as a business owner?
In one sentence, state who you are and what your background is. For example, include your leadership potential and dedication, but also any technical, commercial, organisational or financial experience to date.
2 What does your business do?
- What are your business's commercial activities?
Explain this in one sentence.
3 Marketing plan and market research
- Who are your customers?
- What's your target group?
- How are you planning to market your product or service?
- What market do you operate in?
- How will you promote your product?
Briefly explain who your customers are and what your market is.
4 What are your strengths?
- What problems are you good at solving?
- What sets you apart?
- What are your USPs?
Briefly explain why customers will buy from you and what makes you unique.
5 Financial plan
- How much money do you need?
- How will you get financing?
- What requirements do you have for financing your business? Perform a Finance Scan.
- What will you be funding with the investment?
- When do you think you'll be able to earn a return on investment?
- What financing options are most suitable?
State how much money you need and what the investor gets in return.
Video pitches are also growing in popularity with the advent of crowdfunding. Elevator pitches are also becoming increasingly popular. These are pitches lasting 60 seconds in which time you have to present yourself and your product or service to an investor. Investors won't be convinced by a mere idea. They're looking for a solid business case, a realistic turnover/profit forecast and drive. Often, there's very little time to make a first impression, so prepare well!
What the investor may ask of you
Investors may ask whether you'll be putting your own equity into your business. If not, you'll have little if any chance of securing a bank loan. Only once you've accumulated a certain amount of your own risk capital, e.g. from informal investors or family, can you improve the chances of your bank lending you money. But even then, your bank will still ask you for a some form of guarantee.
Bear in mind that different types of financier will play very different roles. Some may want to be involved hands-on, others will want to remain in the background. It's important therefore that you get on well with your financier. The real work begins after you've struck a deal. From that point on, you'll be sharing responsibility for turning your idea into a roaring success.
- Write your pitch in spoken language so that it's easier to present.
- Be enthusiastic, especially at the start.
- Make sure you have a powerful opening line.
- Make it personal. 'Soft' factors also play an important role.
- Keep it short and simple (KISS) – max. 1 minute (100–200 words).
- Stick to the essence of your story.
- Keep it upbeat and interesting.
- Let them see the passion you have for what you do – verbally and non-verbally.
- Use the present tense, e.g. 'I make websites' not 'I made websites'.
- Avoid jargon. Don't use words that are unfamiliar to people outside your sector or industry.
- Personalise your pitch. Every investor is different.
- Close with a question, e.g. 'How can I help you?'
- Practise your pitch with friends or acquaintances and/or in front of the mirror.
- Can you explain it to the least business-minded of your friends? Did he or she understand your pitch?