The biggest problem faced by startups is financing. You might have a good and promising business idea that could turn out to be a multi-million dollar business but without funding, little or nothing can be achieved. The most effective and sure way of getting funding is by convincing investors to invest in your business.
Some people with great business ideas have failed severally while pitching their idea to investors because of some factors some of which are within their control. These factors are due to lack of certain rudiments that investors wish to hear which leads to the negligence of such ideas by the investors.
There are so many investors who are willing to invest in business ideas but as calculative fellows, they will not want to invest in any business that they do not see its potentials. Their inability to see the potentials inherent in your business idea is as a result of the way you present the business (pitch the business idea) to them.
In this article, we would be looking at some tips that will make your business pitch irresistible to any investor. They are simple tips that we oftentimes tend to neglect and so, they are within what you can do as an entrepreneur or a spokesperson for a startup.
Tips for entrepreneurs and startups on how to effectively pitch business ideas
Here is a list of tips on how to pitch business ideas to investors and get funding:
- Keep it short and simple (KISS)
- Tell a story
- Tell investors about yourself
- Practice the pitch for a number of times
- Give investors the feel of your business idea
- Show the uniqueness of your business
- Tell them the size of your target market
Keep it short and simple (KISS): experts suggest that you pitch your business idea, in not more than 15 minutes. This is to ensure that you do not bore investors with things that are irrelevant. You should not say what you know is irrelevant so as to cover what you need your investors to know. It is not ideal for you to go into details on the figures and other aspects of your business.
Tell a story: statistics show that whenever you begin a talk with a story that your audience could connect to, you win their emotion and tend to get their attention. In pitching your business idea, it is important that you tell a story about how it all began. That is, what lead to your venturing into the business and also how your business tends to solve a particular problem in the society. It is important however that you avoid irrelevant details in a bid to make the story captivating.
Tell investors about yourself: yes! Investors wish to know the qualifications that you have got that will ensure that the business becomes successful. It is important to talk about certifications that are related to the business and avoid talking about other certifications unless you are asked.
For example, if your business is a tech startup that for instance offers an online service, you can mention your web-programming, online marketing, etc. certifications and not going ahead to bore them with your primary, secondary and tertiary school certifications.
Practice the pitch for a number of times: it is important that you practice the pitch a number of times before the main pitch so as to find out aspects that were not included. This should be done however before experts and not just anyone.
If you have team members, they can be your audience or you can find experts in the field and present before them. Entertain questions from them so as to add any vital aspect that you may have forgotten to add.
Give investors the feel of your business idea: investors tend to pay more attention if your business has already started or produced something. If you have a product, get the best prototype when going for the pitch. If not, prepare an animation or softcopy prototype that you will present to the investors and not go on the pitch with anything relating to the business.
Show the uniqueness of your business: the truth about most business or startups is that there is nothing new. There is no new idea that you can come up with that the investors have not seen, heard or read about. This said your main aim should be on convincing them that your own version of the business is unique.
You should point out why people already using a similar product or service would go for your brand instead of others.
Tell them the size of your target market: almost all investors are interested in making a profit on their investment. They tend to pay less attention and not willing to invest in your business if they do not see a way of getting profit from their investment. Present your target market to them and the potential profit the business tend to make from the market.
If you are not sure of the figures, an intelligent estimate can be done and presented in a way to make them believe you and thus, invest in your business.