Winning business plan pitch

After a business plan has been written, the next stage often involves pitching the plan to prospective investors. This very fact means that the plan authors and management team should be one and the same and that ‘outsourcing’ the business plan writing process should not be considered. It is not just the content of the business plan that is being scrutinized. The capabilities of the management team are also on show and hence their ability to deliver a presentation in a clear, concise and convincing manner are vital to the overall objective – that of convincing an investor to invest in the business. These prospective investors are not investing in a physical document but in an idea and in those proposing to deliver the idea. The following is a list of tips to maximise your chances of success when pitching to investors.

1. Know your audience

All presenters are taught about the importance of knowing their audience and engaging with them on a personal level where possible. The Internet has enabled us to research more effectively than we were able to in previous years, so it is important to use this resource to our advantage. Investors have a range of asset classes to choose from as they decide on the composition of their investment portfolio. Hence it is necessary to understand the backgrounds of the prospective investors and their motivations prior to presenting. Once you have done extensive research on the investors it is then possible to tailor the pitch accordingly.

2. Tell a story

One of the most effective ways to pitch is to place the investment opportunity in the context of a story. Ideally, the story will focus on a problem encountered and the fact that the new idea being pitched solves this particular problem. If the investors can relate to the problem, they are more likely to invest in your business. After that they will be assessing how many people are affected by ‘the problem’ and whether the proposed idea satisfactorily resolves the problem. Finally, if they believe that the idea can solve the problem profitably and it is defensible (via patents, trade marks, etc.) it is likely they will be interested in investing.

3. Prepare to win

Pitching to an investor is not a last-minute afterthought – it is the culmination of weeks, if not months, of planning. All too often, entrepreneurs do not plan accordingly and then find that the preparation of their business pitch suffers. Preparation for the pitch should commence as soon as the business plan process commences. For many investors, the executive summary of the business plan is what opens the door for a presentation, and the full business plan may only be read after a successful presentation has been delivered.

4. Pay strict attention to the detail

Your typical investor will have a good eye for detail and hence the plan and its pitch need to be mutually reinforcing and containing no inherent contradictions. From the outset, there should be one owner of the process who can oversee all preparations and is ultimately responsible for the content. This is particularly important if a number of disparate contributors have worked on the plan and where the pitch consists of numerous participants.

5. Avoid death by PowerPoint®

While the average plan is produced in Microsoft® Word and Excel, PowerPoint tends to be the tool of choice for presentations. While it undoubtedly has advantages in terms of aesthetics, it can be misused when utilised at the pitch stage. The number of slides should be kept to the bare minimum, the content must be rigorously analysed to ensure relevance and clarity and time must be managed carefully. It is recommended each investor receives a slide deck, which contains more detail than the presentation itself (with Appendices used extensively). Finally, it is important to manage the subsequent Q&A process carefully as this is the stage where the investor gets to request information about details that they require to convince them that the proposal is indeed worthy of their investment.