Pitching Your Business Idea
Entrepreneurs looking for an investment in their new business venture must have the ability to deliver an effective pitch, and in a sense they must be good salespeople. Having a good idea with a solid plan in place may not be enough. Pitching your idea to a potential investor is no easy task and many entrepreneurs struggle with this. Nerves can often get the better of you and at times the value of the business idea can decrease following a weak pitch. RTE’s Dragons Den provides us with evidence of business people, often with excellent ideas, that simply cannot communicate them effectively for whatever reason. Hopefully the following tips will make the daunting prospect of making a business pitch a little easier.
Like any business or professional presentation pitching your idea should involve the four P’s planning, preparing, practicing, and of course presenting. These rules almost go without saying. We all know the importance of speaking clearly, making eye contact, and using attractive slides; however what is really going to make you stand out from the crowd to the investors are the following.
1) Know your audience: Before entering the room in which you will make your pitch you should know exactly who will be facing you. Surprises on the day can throw the entrepreneur off. Potential investors should be selected carefully. It is not a case of just getting anyone to invest in your company. They must fit well with the start-ups business culture as well as the product or service being provided. You should know as much as possible about their interests or other business activities or involvements. The presentation style may have to be altered depending on the audience so this is something else that should be kept in mind.
2) Be passionate – sell the idea to them: Perhaps start the presentation with a one minute elevator pitch and include only the important details. Do not immediately ask for money or come across desperate. Make it feel like they would be lucky to invest in a product or service. Most of all be passionate, enthusiastic, and genuinely excited about you new business. If you are not excited about it you can’t expect others to be.
3) If appropriate use props, prototypes or demonstrations: This may be particularly important for new start-ups that are highly technical or complex to explain. Perhaps showing the investor how the product works may be more effective than trying to explain. If your business is a website it may be a good idea to have some screenshots of the site within your slides. If an investor is going to part with his/her cash they will want as much details and knowledge of what they are buying into as possible. At the same time don’t over complicate things. For a simple product or service that can be easily communicated, including props may actually over complicate the pitch.
4) Back everything up with numbers: I can’t emphasise this point enough. At the end of the day investors are looking to make a return on their investment for the most part. They are results driven and knowing your figures for sales, profits, costs etc is absolutely essential. There is nothing wrong with having a small page or record card with your figures on them. Pitching an idea is an extremely difficult task and if you feel that remembering all figures is too big a task don’t do it. The worst thing you can do is forget a certain figure, panic and then be thrown off for the entire presentation. Your projections in terms of profits, sales etc should be realistic. By all means aim high and be optimistic but he numbers must be backed up.
5) Learn from mistakes and rejection: Securing an investment is no easy task! Don’t be disheartened if you do not succeed. Take the advice on board and make the relevant changes. Think about which questions you could not answer or answered poorly. The more experience you have at pitching your business idea, the easier it becomes.