When you approach a small business investor, there is one thing that can either help your business take flight or sink it into the dust. What is this single? Your pitch.
How you approach small business investors is essential when you are seeking capital to launch your business. However, how do you know how to craft the perfect pitch? Take a look at these 8 top tips to remember when you are approaching a small business investor.
Imagine you are sitting on the opposite side of the boardroom table, and you are looking at a potential investment. You know that only one in ten investments go big, or even 100 in 1000 pitches. How would you analyze the potential investment in front of you? Chances are, you won’t have much time to spare if you are the one sitting on the other side of the table. There are a few key characteristics that potential investors look out for, and a brilliant pitch will cover all of these critical points.
- Keep it Short
Your pitch’s timing is everything. The pitch should be short and concise. If you have an excellent business idea, but let your pitch take too much time, then your potential investors will not hear the brilliance- only the boredom. Bear in mind the following when planning your pitch:
– Design your pitch to be a minimum of one minute less than the time you’ve told the investors it will take. For example, if you have said to them that it will take 15 minutes, then make sure that it is no more than 14 minutes.
– If the potential investors have given you a time limit, then ensure that your pitch is way below that time limit; at least five minutes below.
– Never overuse the words; “and finally” or “one last thing.” Only use these phrases if you are genuinely saying the last thing.
– Just because you are pushed to have the pitch be short, doesn’t mean that you have to rush it. Make sure to plan the pitch so that it is well paced out, even up until the end.
– If you are using a power point or a slide presentation, keep the attention on each slide short and sweet.
Are you worried that you the time is too short? Remember, if your investors are interested then you will know immediately because they will be asking you questions and will still have their interest peaked. Remember, there will be some investors that just won’t work well with your type of business idea or product- don’t take this personally. Do your research and find out what investors would be more suited to your type of business, and you should find more info about positive investors that want to see you succeed.
- Keep your Pitch Interesting
Use storytelling to your advantage. Storytelling can captivate your audience and keep them hooked. Just because you are talking to potential investors and men in suits doesn’t mean that they are not susceptible to the psychological powers of storytelling.
Incorporate the pathos that drives you and your startup, and tell your story.
- Have a Sharp Focus
An investor has limited spare time, and even that limited time is valuable. Therefore, if you enter the room and perform your pitch with focus, then you will convey the fact that you respect their time. Moreover, if you can convey that you respect their time; then you are communicating that you will respect the investment as well.
Not only should you be laser sharp with your focus throughout the pitch, but you should also hone your attention on the most important aspects of your business ideas as well.
- Identifying the Most Important Aspects of your Pitch
Yes, it would be best if you gave the potential investors an excellent idea. However, you also need to be able to provide your potential investors with something tangible as well. Therefore, you should have a picture of the product or a prototype of the actual product. In fact, because you have kept your pitch to the point, you may wish to provide additional information to the investors which can be done through a brochure or booklet. Look for firms like Printivity that can print these out for you in any form you like; hand them to the investors before or after your pitch with all the information you want to include.
One of the major mistakes people make is going on and on about the product. Make your points concise, but be sure to include (more important than the actual product) how the product can make a profit. Give a concise description of the product then move onto the money aspect. How can the product, business or service increase revenue?
- Make Sure they know makes your Idea or Product Unique
This is important; make sure that before you walk into the meeting, you know exactly what makes your product unique. If your product is not unique in any way, then you need to go back a few paces and incorporate something unique into the design.
- Whom Are You Targeting?
This is a general run-of-the-mill question to ask yourself. You need to know who your target market is. Once you arrive in the meeting room full of investors, those guys are going to want to know exactly where (or rather, who) their potential profit will be coming from. You need to communicate that you understand your target market, and you need to present some data as well to back-up your claims.
- What is your Marketing Strategy?
Okay, so you have your target market outlined. Now, you need to detail how you are going to infiltrate that market and acquire the customers. It would be best if you communicated what your marketing strategy is. What processes or techniques are you going to use? This marketing strategy needs to be well planned and a guarantee for success before you walk into the meeting. Also, you need to bear in mind that no new business, product or service will be financed if there is no digital marketing campaign. Make sure you have this planned before you approach investors.
- What is your Revenue Model?
Ask yourself this question; why would investors actually invest? It is not because they want to help you to achieve your dream. Honestly, most of the time they couldn’t care at all about your dream. Investors invest because they can make a return on that initial investment. Therefore, you need to tell them how your business idea, product or service will make the investor more money.
Walk into the room with a passion for your product and deliver your pitch with enthusiasm. At the end of the pitch, you need your potential investors to feel the energy pulsating off of you and the product, leaving them curious for more.