From the course: Small Business Secrets

Crafting your pitch

From the course: Small Business Secrets

Start my 1-month free trial

Crafting your pitch

“

- Many entrepreneurs at some point or another want to go get additional funding for their business. One of the questions they'll ask me is "How do I make a pitch to someone "who might invest in my business? "Should I be cheesy? "Should I be over the top? "Do I keep it to a very by-the-numbers presentation? "What should I do?" Keep mind that investors really want to see one thing, which is they're going to make money. By investing in you, they want to see that money is going to come back to them. In the next video, I'll talk about some of the options of people that you can talk to to get investments, but in this video, I want to talk to you about some of the things to keep in mind when crafting that pitch. We're going to do this as a series of dos and don'ts. First of all, do be candid. Be honest. Be completely open and transparent. That will help other people have confidence in you because they'll see that you're being genuine and you have nothing to hide, which leads to the don't. Don't hide things. If you've had problems in the past, if you've made mistakes in the past, own up to them up front. That actually will give potential investors more confidence because they'll know that you're not going to keep these things hidden from them in the future. Next, do provide hard sales numbers. When I talk about hard sales numbers, I mean what your business has actually been doing. If it's been in business, show the numbers for good or for bad. If it's a new idea, have research to back up your projections. Go out and ask that most valuable customer that will be buying. Ask distributors how much they'd be willing to purchase from you. On the don't side, don't be speculative. One of the biggest red flags for potential investors is the phrase "Well, all we need to do is "capture five percent of this entire market," and fill in the blank. What that means is that you really didn't do any research other than looking up the size of the market. No, we actually want to go out and get hard numbers. Next, do provide a sample or an example of your product or service. If you're selling a product, bring it, so that they can hold it in their hands. If you have food, bring that so that the investors can taste it and figure out what it's like. If you have a service, as much as possible, try to demonstrate how you do it so that they can see your effectiveness. On the don't side, don't have a presentation that's just full of words or even just pictures. That's not enough for investors to really get a taste and a feel of what it will be like to work with you. Next up on the do is have a proprietary advantage. When I talk about proprietary advantage, I mean what is it that your business can do that no one else will be able to do? Do you have a patent or a patent pending? Do you have a trade mark? Do you have special access to certain distribution channels? What is it that gives your business an advantage over any others? On the don't side, don't try to compete head on. If other businesses are already doing what your business is doing, that's a sign to investors that they're in for a long struggle and they may not get their money back. If you're doing something that is a great idea, but can easily be copied by the big guys, that also is a potential downer for investors. Next, do talk about your relationships. Talk about the people that you're connected with. What is your team like? Who do you have assembled around you to help make this business successful? Have you assembled a board of directors; people who can advise you in this industry and give you special access to the things that the business needs? Don't be just a solo artist. People want to see that you've got back up, that you've got expertise that you bring to the table as well. Yes, they're going to help you out in and advise you, but you don't want to be just going it alone. Do be invested. Demonstrate to your investors. Show them that you have put your own money into the business already, that you've put lots of your own time and blood, sweat, and tears into the business already. Why is that important? Because they want to know that you're committed, that when the going gets rough, and it will in a business, that you're going to stick in and do whatever it takes to help the business succeed. Don't expect them to do everything. Don't expect them to be the only people putting money into the business. Don't expect them to have all the expertise and all of the connections to make the business succeed. No, they want you to bring stuff to the table as well. In the end, making an effective presentation to investors is about being yourself. Yes, they want to make money, but they're investing in you as an individual. If you can be yourself and provide solid numbers and evidence to back up how your business is going to succeed, you'll be much more likely to attract the eye of an investor who's willing to get into that business with you.

Contents