It can be easy to come up with a business idea, but knowing how to pitch it is an entirely different matter. Pitching a business idea can be a nerve-wracking experience, but doing it effectively is key to getting others on board and turning your vision into reality.
To help set you up for success, here’s our step-by-step guide on how to pitch a business idea.
What makes a great pitch?
A great pitch needs to grab the attention of your listener and give them a clear picture of your idea or concept. To do this, it’s crucial that you fully understand your idea, your growth strategy and your overall business plan. You need to understand the steps that are required to make your idea a reality and be able to instil confidence in your investors that they can expect a return on investment.
To have the best chances of persuading others that it is a worthwhile investment, you’ll need to be able to show complete confidence in your business idea when you’re pitching it.
Pitch a business idea in 5 steps:
Identify your target audience
As a first step, it’s crucial that you research potential investors to establish who you need to pitch to. Getting the right investment is not only about money – it’s also about building a partnership.
When researching investors, consider factors such as the types of industries they invest in. This can help you to tailor your pitch and concentrate on their priorities.
Also, think about what stage they invest in – do they prefer early-stage or more established businesses? You should have a rough idea of how much money you need to launch your business idea, and then select investors who will help at that particular stage.
Check the investor’s previous experience and investment history too to establish the type of firms they usually invest in, and how they have helped businesses in the past. Consider whether your personalities will fit together. Doing so should help you to adjust your pitch and find the right person to partner with.
Present yourself and your business
The way you present your pitch is just as important as its content. It’s important to make eye contact, show your hands, stand up straight and smile. Investors will want to be sure they are going into a partnership with the right people. They’ll want to know whether you and your other team members or founders have worked together in the past, and whether you are flexible and open-minded.
You should also be prepared for investors to raise concerns about your business idea and be able to take feedback onboard without getting defensive. It’s wise to prepare in advance and write a list of potential challenges you might face from investors, along with how you will answer them.
If, during your pitch, a question comes up that you are not able to answer, be honest about your uncertainty and say you will look into it and get back to them with a follow-up email. Companies want to partner with people who are happy to be given some guidance and who they can trust.
Create a narrative
Using a story or real-life scenario to explain your idea in more detail can help draw your audience in. Your story can enable you to highlight a problem that exists and how your product or service will help solve this issue. Or you can tell a story about a challenge you faced and how this led you to develop the business idea.
Creating a narrative will help engage your audience and show them how your idea will actually help people. If they can relate to the story, your pitch is more likely to be successful.
Go into detail
Detail is key when pitching your business idea. You will need to define your value proposition (a statement that explains what your brand does and how it differs from competitors) and include:
- The size of the market
- Your plan to attract and keep customers
- How you will protect yourself against competition
- Your plan to make revenue
- How much capital investment you need
Demonstrate your roadmap to success
Your pitch also needs to show investors how they will cash out in the end. It’s important to highlight some of the possible exit strategies, such as through acquisition, merging with another company, or an initial public offering (IPO).
Common types of business pitches
There are different types of business pitches to explore and it’s important to consider the one that best matches your audience and the time you have available to you.
The elevator pitch is a way of explaining a startup’s value in 30 to 60 seconds – in other words, it’s a pitch that could be delivered during an elevator ride. The pitch needs to be concise, convincing, and explain your startup’s value proposition. At the end, you should include a call to action, such as how much capital you need to get your business off the ground.
A short-form pitch should last between three and 10 minutes which means you’ll need to explain the value of your business idea to potential investors as efficiently as you can. You’ll need to summarise the most important parts of your idea, as well as the market size, how you’ll protect yourself against the competition and how much financing you need. Your aim is to get investors interested in the hope you might be given the chance to present a long-form pitch.
If you have the opportunity to present a long-form pitch, it’s crucial to be prepared and make the most of your time. You’ll need to cover every part of your business plan, create a narrative and outline the market size to highlight demand, as well as have examples on how you’ll attract customers.
You should also be able to show how you plan to generate revenue, how much investment you need and what your exit strategy is.
Which is the most common type of pitch for funding?
The elevator pitch is one of the most common types of pitch for funding. However, if you do it well enough and it piques the interest of investors, you could be asked to present a long-form pitch which will enable you to explain your business idea in more detail.
It can be worth preparing all three pitch lengths so that you’re ready for any opportunity.