If you’re starting a business, the truth is you’ll need to get funding. Last month, I reviewed the sources of funding for small businesses. Regardless of your sources of funding, you’ll need to follow the five golden rules of pitching your business so you can get the funding your small business needs.
1. Respect Your Audience’s Time
Nothing is more annoying to an investor, even a family member or crowd funder than a pitch that is round-about. Be upfront about what you’re asking for and what your investor will get. Start a meeting by asking how much time they have and how they would like to use it. Chances are, they’ve read your pitch deck and your website. Make sure your limited time is useful for them so they can be useful for you.
2. Make it Personal
Many investors believe passion is a key ingredient to entrepreneurship and will push teams towards creative ideas, and tenacity. Your pitch must communicate this by explaining why you’re passionate about your idea. Include how long you and your team have wanted to start a company like the one you’ve envisioned.
3. Be Honest
Investors will see right through you and often press you until they find a soft spot, if only to uncover how you react. So don’t waste time by lying or with half-truths. If you don’t know an answer, reply, without shame, “I don’t know. Let me look into that and get back to you.” And it’s OK to admit that you’re not 100% sure you have the right strategy or team. Explaining that you are still testing and open to learning from experience and experts is the sign of a flexible and open entrepreneur that many investors seek.
4. Keep Your Presentations Simple
Most investors will require some sort of pitch deck, a PowerPoint presentation where you can explain the opportunity of your business, your plan to capitalize on that opportunity, why you’re the person or team to be successful at it, and when your investor will see a return on their investment. Startup guru, Guy Kawasaki, offers some solid advice on creating a simple pitch deck in just 10 slides and even has a template. Of course, if you’re pitching more sophisticated investors you’ll do better to personalize a template, but the structure is there.
5. Know Your Numbers
Above all, your pitch must include the financials and your ability to speak to them in any way. Explain the break-even point giving several different scenarios, your burn rate and when you’ll need to raise more money. Explain how the investment you are asking for will improve these numbers, dramatically and how you foresee the market changing in the future and how you’ll be prepared to capitalize on these changes.
Pitching your small business will provide the funds you need to continue, but will also give you the discipline you need to be successful in operate it. To learn more, be sure to join us for our free webinar on January 17 on raising money for your business.