Keep the following guidelines in mind, and you’ll soon find yourself with a welcome cash infusion.
Engage your audience while introducing yourself and your business.
Yes, you want to give potential investors facts and figures regarding projected revenue, but doing this the moment you open your mouth will cause their eyes to glaze over. First, make them care about you and what you’re attempting to accomplish with your business. Tell an entertaining story that relates to your product and service and shows how your business fills a need in the marketplace. Point to examples of your success for such stories, which will help establish the credibility and uniqueness of your product or service.
Keep in mind when creating a pitch that investors are not only investing in your idea, they’re investing in you. The more dynamic and likable you appear, the more likely you are to get funding.
Reveal your target market.
Now is the time to present the statistics. Investors want to know the potential for sales and customers your service or product can attract. Avoid making sweeping statements regarding everyone being a potential customer. Instead, give a realistic view of the market you will target and the portion of that market you can actually reach.
Outline your marketing plan.
Savvy investors know that marketing can be more than half the battle when it comes to running a successful business. When creating your pitch, be clear about how you plan to reach customers and your budget for doing so. Prove the viability of your marketing plan by sharing the successes you’ve had so far reaching your target market, including sales and contracts.
Cover your competition.
Investors are more likely to invest in your business if you give a realistic view of what your competition offers and how your product or service is better. Present this information in an easy-to-understand format. For instance, show a chart of benefits and features, with your business standing above your competitors. Also be sure to convey a detailed understanding of the competitive landscape, which assures investors that you are well aware of the playing field and any possible land mines.
When presenting, make your value proposition clear, outlining how your competitive edge makes your business the most attractive to potential customers and how you plan on achieving a sustainable differentiation in order to stay competitive. This is especially important in trend-oriented businesses gaining momentum.
Detail your revenue model and share financial projections.
Investors are obviously extremely interested in how you plan to make money and how much. Show that you understand costs associated with conducting business by clearly outlining your business revenue model, specifying the creation and delivery of products and services, as well as pricing.
Also provide financial projections per product over the next three to five years. Investors gravitate toward businesses with the highest sales potential, but avoid overestimating your profit. Make certain all of your supporting numbers add up and are clearly explained. Include profit-and-loss and cash flow statements.
State your funding needs.
Be clear about how much money you require and exactly how you will use it. Include how much money has already been invested and by whom, as well as ownership percentages. And indicate if you will require financing in the future.
Introduce your team.
Given that they are investing in you and your people as much as they are investing in your product, it’s important to let investors know who makes up your team. Seeing that you have all the key people in place shows you know what it takes to run a successful business and are likely to make good use of their investment.
Now that you know all the key ingredients of creating a perfect pitch, you can put together your proposal and get that funding you need.
Read more articles on funding.
A freelancer since 1985, Julie Bawden-Davis has written for many publications, including Entrepreneur, Better Homes & Gardens and Family Circle.
Photos: Getty Images
