Preparing the Perfect Pitch for Your Small Business
Guide to Polishing Your Ideas and Crafting A Presentation in The Perfect Pitch to Investors
Finding seed money is important for most entrepreneurs and small business owners. Those without the necessary capital to fund their own business pursuits will need the perfect pitch for venture capitalists (VCs), angel investors, peer-to-peer lenders, banks, and even a crowdfunding websites to provide financial backing. Forging partnerships and acquiring the capital all begins with the perfect pitch.
A perfect pitch should highlight the key components of your business plan. For any idea to transition into a profitable business an official business plan is essential. A perfect pitch is a compressed version of this business plan. It should be detailed enough to review key details but quick enough to be compelling. Use your crafted perfect pitch as a tool to not only describe your business but motivate investors to get on board.
Pitching your business happens in different settings. While networking you may find yourself informally pitching your business at cocktail parties. Refining your pitch over time in casual settings will help you prepare for the big leagues.
The perfect pitch should comprise:
- Industry Analysis
- Customer Demographics
- Demand & Needs
- Business Model
- Overview of Competition
- Implementation Plan
- Financial Projection
- Financial Needs
Follow these guideline instructions to get your ideas articulated into a polished and sharp perfect pitch.
1. Be a Boy Scout: Be Prepared
Before you prepare your presentation you need to decide what tactic you’re going to choose. Honor your strengths. If you are high-energy and can think on your feet, use your instincts and let this guide your preparation. If you’re an introvert let your stylized presentation deck carry the task of awing your potential investors. The point is, regardless of what personality traits you are bringing to the table, anyone can make a perfect pitch. It’s all in preparation.
Find out who you will be pitching to and their background industry. Try and forecast the questions they will ask. Deliver the answers in your presentation and be prepared to elaborate after the presentation. Know the ins and outs of your business—the strengths, the weaknesses, and most importantly how you plan on putting investors’ money to good use.
Write out your business plan into, at most, a five-minute presentation. Aim for succinctness and don’t go on tangents. Practice your pitch in front of real people until it is perfected. As you practice you will become more familiarized with your pitch and will develop confidence. An old anthology from Malcolm Gladwell advising practicing any task for 10,000 hours to become an expert. That’s how the Beatles did it, that’s how you’ll do it.
2. How to Make the Perfect Pitch Resonate
Early on in a business, the business plan, and as an extension—the pitch, is the core of your brand. These are tools to tell the story of your company. Telling an effective story boils down to two things in a perfect pitch—emotional connection and engaging material.
Figures and logistics should be the backbone to your presentation but just as appealing is the emotional resonance of your pitch. Watch any Coke commercial and you’ll know what we’re talking about. Coke as a product will sell, but the global nostalgia for Coca-Cola is much more captivating. Psychologically, humans tend to react emotionally first, then rationalize later with logic. Use language that appeals to this pathos.
Every business pitch has anecdotal emotional appeal. Whether you’re a mom-and-pop dog grooming business or a SaaS start-up you have a story to tell. Your entrepreneurial drive is a narrative in itself!
The other key component to engage your prospective investors is interaction. A psychology study from Ohio State University reports that the longer we hold something, the more we feel ownership over an object. Thus, the longer an investor holds a product—feels ownership—the higher value they are likely to place on this object. When a person can play with a product and see it’s functionality this physical interaction becomes part of the perfect pitch.
3. Promote Your Experience and Sales Figures
Investors want to see an ROI (return on investment). To make them feel comfortable in taking a calculated risk in your business pursuit you need to express your business skills. This is where industry analysis, consumer demographics, demand, and competition overview will take place. Show that you’ve done your research!
This is where you’ll answer questions:
- How much does it cost to make?
- What are you selling it for?
- Does anything like this exist on the current market?
- What do you think you’ll do this calendar year?
Intuiting these questions will guide your answers for them. Even if a point in your presentation shows a weakness in your business plan, a well thought out answer goes a long way. This shows that you know your industry and you possess the abstract problem-solving skills it will take to be successful. This can win over an investor’s’ confidence.
Even if you don’t have impressive sales yet, showcasing your knowledge shows your business competence. If you do not have the financial data to back up your claims present your vision in an organized way. For example, a hypothetical business has made a revolutionary kitchen utensil that the inventor believes will revolutionize the industry. The business has not made impressive sales yet because they need financial backing to scale the manufacturing. Walking a panel of investors through this plan of action shows them clearly why there is a lack of sales and the solution to the problem.
Sales and experience both explain product validation.
Having a professional strategy at this part of the presentation could mean the difference between failure and the perfect pitch. Finding investors takes balance. Investors have leverage in their capital and you have leverage in your company appraisal. For all parties to walk out happy, some healthy negotiating might be in store. Keep in mind, of course, with banks or an SBA loan there is no wiggle room. Negotiation with private lenders is more traditional. Often private lenders will have the terms approved by the SBA.
Again, preparation is key to a successful negotiation. Make sure your appraisal is accurate and you know the detailed figures of your company’s product or service. Be able to quickly highlight strong aspects of your business to leverage unsavory offers. Know what you’re willing to accept and where you will not compromise. Use this range to help you find the mutually beneficial sweet-spot during negotiations.
Most importantly, be humble and strategic. During a negotiation, you will need to strategically counter with facts, not emotional appeal. Don’t let your counters be confrontational. Instead, let them show another perspective and financial route an investor might be willing to take. An ideal situation is a win-win and prevailing with competency and fairness will gain you more in the end.
5. Calm and Collected
We’ll be honest here. Giving any kind of business pitch is going to be nerve-wracking. In some cases, an entrepreneurs’ whole life-savings could be on the line. This is the hot seat. The best way to keep cool in the hot seat is action.
Feeling nervous is completely normal and an innate human response to giving a presentation but use this anxiousness to your advantage. Channel that energy into passion. Stay positive. Beforehand visualize the positive outcomes of the presentation taking place in your imagination. Take deep breaths and smile.
During the presentation stay comfortable. If you are anxious it will make your potential investors uncomfortable and this might be viewed as a deficiency. The more practice you have with your presentation, the more second nature delivering the pitch will be. Even the perfect pitch might not have all the answers. If you are caught off guard just stay focused. There is nothing wrong with saying, “Great question. I don’t have the data right in front of me but let me do some research and I will get back to you on that point.”
Even if ‘the hard questions’ come out, this is a good sign. This is the pivoting point from your presentation pitch to a conversation discussing the viability of investing in your business. Ask for guidance and brainstorm with those in the room when appropriate. The most important thing to remember is that even if things don’t go according to plan, this is not the end. Learn from the experience and keep chasing down your dream.
Follow Splash and Dash Groomerie & Boutique:
- Website: http://splashanddashfordogs.com/
- Website: https://splashanddashfranchise.com/
- Facebook: https://www.facebook.com/splashanddashfordogs/
- Instagram: @splashanddashfordogs
- LinkedIn: https://www.linkedin.com/in/dan-j-barton-622ab517
- Twitter: splashanddash4dog