How to Pitch a Business Plan
Pitching a business plan requires passion, salesmanship, logic, charisma, determination and due diligence. Investors or bankers must be convinced that the money put at risk has a good chance of being paid back with significant profit. A good business plan depends on sound strategy as well as good delivery of the pitch. A good business plan must be presented well or the message will not sink in. A business plan pitch must sell the idea that the business makes sense and that the company's leadership can execute the plan.
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Things You'll Need
- Suitable clothing
- Handout describing the business idea
- One-year, three-year and five-year projections
- Handout detailing the business leader's qualifications
- Handout of the funding request with suggested terms
Instructions
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Wear clothing that conveys success and confidence. It is important to look the part.
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Present the business idea in a logical, concise way. How a message is delivered is almost as important as the message.
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Prove the business is a good idea. According to the U.S. Small Business Administration, that is the No. 1 goal of a business plan pitch. Show that the business will lead to long-term profit growth and that earnings will increase within an acceptable time line. Prove the idea is not easy to copy or that other products or services can't replace it. Detail how the economy may impact sales, profits and growth. Explain why it is a compelling value to customers. Explain why the plan makes sense. Provide profit and loss estimates, marketing strategy and milestones. Also provide a one-year, three-year and five-year projection of sales, earnings and market share.
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Validate the leader who will carry out the plan. Explain why the company's leader is the right person for the job. According to an article on "The Wall Street Journal" website, many plans are rejected because the company leadership does not have hands-on experience. Show how the leader of the company succeeded with similar circumstances in the past. Detail his experience and educational credentials. Explain why he can be trusted and why he can execute this particular business plan. Prove commitment by mentioning the leadership has significant personal funds tied to the business plan's success.
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Ask for funding. Keep as much control as possible. Insisting on a deadline for a decision is important because a good idea is perishable; wasting too much time with an investor who can't make up her mind will kill an idea. Move on to the next investor after a reasonable amount of time.
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Tips & Warnings
Limit the number of investors to as small of a number as possible. The more investors, the more interference and the more complex decision-making will be.
When a deal is in place, focus on getting cash flow positive as soon as possible. Many software programs can track cash flow and raise awareness of cash needs. Investors hate injecting more cash into a new business. The fewer times the call for cash is made, the better. Know the amount of cash on hand at all times. Know the number of days this cash can keep the company going at all times. Understand the impact of increasing sales on cash flow; sometimes growth is expensive. The lag time between paying bills and getting paid can sometimes cripple a company. Build a cash reserve to handle this problem.
Protect ideas with non-disclosure agreements.
Once an investing decision is made, get all the terms in writing.
Insist on retaining as much control as possible.
Try to include a buy-out agreement in case a partnership collapses.
References
Resources
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