5 Tips For Successfully Pitching Your Business Idea
There are many different ways to grow a business, but when you dig deep into the heart of each option, money is always going to be involved. Money will be needed to create a better, more widespread marketing campaign. It will be needed to buy new equipment. It will be needed to hire staff to keep up with demand and to allow you to run the business more effectively because you do not also have to be working in it. No matter how you want to build your business, money will be required.
Where that money comes from is also varied. You could have savings, you might decide to remortgage your house or sell some possessions, perhaps you will use the profits you are making already, assuming they are enough. You might even choose to borrow from a bank. If none of these appeal to you or they are not possibilities for you, there is another route you can take; you can find an investor.
Finding an investor to put money into your business is not a simple task, and there is a lot of work you will need to do before you are ready to pitch your business – including writing a detailed and well thought out business plan. Then there is the pitch itself; this must be polished and comprehensive, getting across all the salient points so that the potential investor has no choice but to want to invest. At least, that is the ideal scenario. Read on to discover some of the top tips for successfully pitching your business idea so that you can find an investor and grow your business in the way it needs to grow.
Know What Your Investor Is Looking For
Whatever business sector you happen to be working in, and no matter what niche it falls into, the investor you are pitching to is going to want to be completely confident that you are going to make sales, attract customers, and retain them into the future. This means you need to show them the facts they want to see about who your target market is, how much they might spend and why they want to buy from you and no one else. If they can be confident about all of this, they will also be confident that they will get their money back, with a good return, relatively quickly. In reality, this is all most investors want from their investment, even though sometimes you will find one who also wants to be involved in the running of the business. The type of investor you choose is down to you.
With this in mind, you are going to need to know exactly who your target market is. You will need to know their spending habits, what age they are, how many of them there are, what they are looking for when making a purchase, how they like to buy (online or in a store, for example), and even their background demographics. By knowing all of this, your investor is going to be able to see what kind of sales figures your business might come up with.
This target market research is one of the things you are going to need to do before you meet with your potential investor to pitch to them and it is not something that can be rushed since you do not want to make an error or miss out any vital component. To carry out market research that is going to provide results that will actually be useful, you are also going to need to know how to analyze the data and use it to show your investors that your business is a viable one; this website goes into more detail on the need for data analysis.
An investor is also going to want to know more about the inner workings of your business. They will want to know what your team looks like and why each member is important. After all, you might need to cut costs at some point and understanding the team dynamic is going to assist with those decisions. As well as that, when an investor knows who is working in the business and what they do, they will be in a better position to understand exactly what is taking place and how it works, and thus how you intend to make money.
Part of your pitch, therefore, should include details about your team, even if that team is just you at the moment. If you are the only person working in your business, you will still need to detail what you do and how you do it (although if it is particularly technical then it might be wise to do this in layman’s terms). You will also need to explain how you intend to grow your team; this will be important to an investor.
The entire point of investing money into a business is not altruism (for the most part, although this can be part of the reason), it is to make money in return. So, an investor must be satisfied that this is going to happen; this is why they will need to know your plans for growing the business and taking on more staff. Make sure you have the details to hand and include them in your pitch, however briefly, to prove that you do intend to hire people.
Have A Cohesive Idea
Any investor is going to want to know exactly what your idea is. Whether you are already working on it and the business has launched, or you need their money in order to do that, they are going to have to be informed of just what your business does or will do. Without this knowledge, the investor will not be able to make an informed decision about whether or not to invest.
Simply telling your potential investor what your business will do is not going to be enough. You will need to supply them with facts and figures and all the research you have done that shows that your business is going to be viable. A wonderful idea is only really wonderful if people are going to spend money on it, and that is what an investor will want to know about. Tell them why you are different (what your USP is) and what problems your product or service is going to solve, and then let them know how many people (thanks to your research) are going to benefit from having that problem solved.
Do Your Homework
As we have mentioned, research is clearly a hugely important part of any business pitch, but it does not just stop at the business itself and who is going to spend money in it. You will also need to research the investors you are interested in speaking to. Do your homework in this regard, and no one – including you – will have their time wasted.
There are many different types of investors, and within those types there are many different people who have money they want to invest. While this might seem like a good thing as the more people who are willing to put money into business the more businesses are going to benefit from it, this is not quite accurate. Each different type of investor and each different investor individually will have their own requirements when it comes to where their money goes. They will be interested in different sectors, in different sized businesses, in different amounts of money.
This is why researching your investors to determine who is going to be the very best one to put money into your business. As a business owner looking for an investor, you might think that you simply have to go with whoever is willing to lend you the money, but you do have choice and making the right choice will be the difference between success and failure. An investor who has contacts in your sector is going to be much more valuable to you than one who does not, even if they both have the same amount of money to invest and are willing to work at the same return rate, for example.
Another benefit of researching the right investors to speak to is that you are much more likely to come away with an investment. You can tailor your pitch to the individual, show that you know what they do and that you understand why they would make the ideal investor for your business, and, because you work in a way they like or an industry they have experience in, they will be more willing to part with their money.
Start With An Elevator Pitch
An elevator pitch is so called because you should be able to give it in 30 seconds – as though you were riding in an elevator with someone you want to impress your business information onto. This is essentially a distilled version of your larger, longer pitch, almost like the blurb on the back of a book. It should be enough to intrigue a potential investor, but not so long that you have to repeat yourself later on.
Once this initial opening has been made, you can move onto the more detailed explanation. By splitting the pitch into two parts, you are giving the investor the chance to ask questions, but also giving them a taste of what is to come. Do it right, and they will be very keen to hear more.