A Pitch can be defined as the act of trying to persuade people, an organisation or entity to buy something from you or do something for you.
So, you are about to start your business and you want to convince investors why they should invest in your business idea, or you want to convince a bank why they should borrow you a loan, for your business, or you want to convince the government why your business idea should be given their full support, then what you need is a Business Pitch.
Note – I am not talking about a business plan, my focus is on the business pitch.
They are 2 different things; you see a business plan is the first thing you create, there you outline your strategy, put negatives and positives, why this will work and that won’t work, there you tell yourself the truth, if you are okay with the truth, and feel you can solve most of the problems that will come, you move on with your plan.
So, you already have a business plan, now you need support, the government support, investors, maybe banks for loans, you need to show them something that will engage them and something that has little or no negatives, you don’t want to show them something that will discourage them, with the business pitch you show the positive sides of your idea, do not lie, or create huge numbers from space, you can chip in negatives to show the problems you will face, but keep it to a minimum of 5% - 10%, people do not like negativity. Let the Positive part of your business idea be your strength.
THE FRAMEWORK
Now let’s persuade people to support our business, by following this business pitching steps -
1. Propose the value of your business, do this by stating the major importance of what your business was created for, what your idea can be used for, you don’t want to be sketchy on this part, if you are creating a drink state what type of drink, a healthy drink? Or something that just fills up the stomach – I call this the “For what purpose?” step.
2. The second thing you need to put forth is the exact type of problem(s) your business idea aims to solve, this is very important, make sure you can show how your business idea can solve a problem on a very large scale and not just a small scale, because investors and people in general like something that can be implemented on a large scale, because it means more sales, which means more profits – I call this the “but why do we need it?” step.
3. The next thing is stating how you intend to use your idea to solve this problem, let’s call this your solution, this is where you have to go really deep and search for your Zen like teaching prowess, people tend to get skeptical when they don’t know the how of an idea being implemented. If you want to create a platform that can predict the future, you should be able to give an overview of how you can do this, not the full details, but something to leave them a spark to at least have faith in your project – I call this the “how I do it” step.
4. You need to state your competitors if you have some already, and be able to explain what they have achieved and the problems they have not solved yet, now this where you show that even if your competitors have been around for a while, you know or have something they don’t, a trump card, a disruption your idea can cause, do not give too much here, just give a hint, make them want more, give them a little more carrot and nothing more, this will pique their curiosity even more – I call this the “why my idea is unique” step.
5. Next up is your target market, who do you want to sell your products to? Who needs your idea? Who are the people who can’t survive without your business? People who are sick? students? males? females? Children? Adults? Mothers? Fathers? – I call this the “Those who need me and my idea/business/product” step.
6. Explain how you intend to sell or market your products or services? Small shops? Malls? Bill boards? The internet and social media? TV ads?
7. State your major goal(s) – what do you hope to have achieved in 2, 3 or 4 years’ time? Maybe 20% market share? Maybe it is increasing your revenue by 30-40% every year moving from country to country and spreading your tentacles, your goals have to be something very desirable, not too impossible and not too easy.
8. Your funding needs - Now, this is a very important step, this is the step we have been working towards from step 1 to 7, this is the step you need support, from bank loans to investors’ money, and even the government. At this stage, you have to be honest and state all the funding you need, you also have to exaggerate and hike up some numbers, why? maybe due to a fluctuating market supply and demand or Maybe increased value Added tax(VAT), maybe emergencies, but most important of all, tell your investors you did exaggerate and hike up some numbers, and tell them why you did so, this shows them that you are a good planner and you are already planning for unforeseen financial circumstances, everyone likes a good planner! you also have to assure them here how you will be made accountable and transparent so they see exactly what you used all the funds for to the last penny or kobo. I will suggest you draw up a table, illustrating this. For example, look at the table below:
Finally, please make sure you also mention some funding needs which you, yourself has taken care of, people like someone who takes on responsibilities no matter how little.
9. Financial projections and Sales Goals – this is a very important step, here you want to state how much sales you should be able to make during your first year (from month to month or first quarter to the last quarter), set up a table like in the funding needs showing your expenses, emergencies, workers’ salaries, taxes etc. create using the Microsoft excel software showing your projected, sales, expenses and profit over the years up to at least year 5. Finally, you should always explain why you believe this projection to be true, what and what do you know and can you use to back up those numbers? Hire a professional, if you have to, just make sure you are able to back up why you would make those numbers, and of course those numbers should be positive! They should be optimistic but also realistic, do not use impossible numbers or create targets that are too high. Below is an example of a chart showing expenses and profits projections over 5 years that I created for a client of mine. (Do note that, this was taken with his permission and some numbers have been changed to avoid legal issues).
Note – as you can see, the profit here is good, but it can be an advantage if you let your investors or the banks know you are already preparing a strategy in place to reduce those expenses. This shows them that you are someone who knows how to manage money, and will put their mind at rest that you would use their money judiciously.
10. Achievements so far – it is very important, you explain what and what you have achieved so far in trying to set up your business, nobody wants a smooth talker who has no action, remember actions speaks louder than words.
11. Finally, you have to state your partners, your team members, employees if you already have some, or other banks, investors or governmental agencies supporting you. State any grant or financial aid you have already received and how you have put it to good use so far.
Preparing all these data, images and figures in a presentation slide, is very important, you can use animations, but make sure they do not distract your audience from what you are trying to make them understand.
So, now you are a Business Pitching Specialist, what are you waiting for? GO! GO! GO!
Thank you for reading!