Pitching your business to investors can be an exhilarating and nerve-wracking experience. Your project is about to make its way out into the world, and there’s nothing you want more than for your business pitch to sound smart and professional. Here are a few dos and dont’s for how to pitch a business idea.
- Get Excited
When you pitch your business idea, remember you want potential investors to feel the same passion for your project that you do. Show excitement for your project, but temper that excitement with flexibility and critical thought.
- Be Critical
Great ideas don’t necessarily equate to great market acceptance, so it’s important to be critical of your ideas and projects–especially before you pitch your business to investors. Ask yourself to consider all the alternatives. Crunch the numbers, evaluate your options and make back-up plans.
Get excited about your Plan A, but be ready to answer questions about what you’re going to do if Plan A doesn’t work. Know how you’re going to shift from Plan A to Plan B, and how even Plan B is going to make your investors a profit.
- Know Your Market
When you go into your pitch, be ready to show your potential investors that you’ve researched your market. Know where your customers are coming from, how you’re going to secure customer loyalty, the cost of customer retention and what your competition looks like. Be able to tell your investors how your project, idea or product fills a gap in the market. What sets you apart from the potential competition? Why are you better than the competition?
- Listen for Feedback
Practice listening for feedback–and not just on the day of the pitch. Seek out feedback in the form of books and talks by people who are further down the business path. Examine how their ideas and experiences could serve as constructive criticism for your situation. While family and friends might not get what you’re trying to do, listen to their concerns. If what they say has some merit, see if you can put it into practice.
- Learn the Difference Between Constructive Criticism and Naysaying
As you build your business, learn to spot the difference between constructive criticism and naysaying. Constructive criticism points out strengths, weaknesses and gives you the tools with which to improve. Naysaying focuses exclusively on or exaggerates flaws without giving you data, in-depth analysis or useful tools with which to move forward.
When you give your business pitch, keep this distinction in the back of your mind. Some investors might be overly skeptical, and you may have to respond to naysaying with an honest evaluation of the strengths and merits of your business. On the other hand, be ready to show constructive critics that you’re open to their ideas and that you’re driven to continually improve.
- Have Good Visuals
Fire up the printer and get ready to make some impressive visuals. Augment your words and ideas with striking and informative visuals, such as graphs, illustrations or statistics. Help your audience see that you’re prepared by giving them an engaging, thoughtful presentation.
- Get Bored
You may make your investor pitch several times, but try to keep it fresh for yourself. In between pitches, try to learn something new about your market or think of something different you can say about your product. Remind yourself why you’re doing this: You have a project that you’re excited about and you want to share it with the world. You don’t want your investors to hear boredom or disinterest in your voice. If you’re tuned out, they probably are, too.
- Make Unrealistic Valuations
As important as it is to stay excited and keep things fresh for yourself and your investors, unrealistically valuing your company is one of the worst things you can do. It doesn’t show smart, critical investors your confidence. Instead, it shows you lack either information, competence or honesty.
To avoid making unrealistic valuations of your company, try to both qualify and quantify every valuation you make. This means you follow a framework like the following: “Due to ____ data and ___ this documented cultural trend, my product is likely to be received in _____ fashion.” Own uncertainty by being able to show that you’ve measured the levels of uncertainty in your idea and product.
- Go in With Poor Visuals
Going into a project proposal with cheap visuals only serves to make you look unprepared. Find good deals on printer accessories to help you deliver stunning business pitches. As a business owner, always have a dependable at-home printer in addition to your company printer, just in case of technical difficulties.
- Think It’s a favor
Remember: Investors aren’t doing you a favor when they invest in your business idea. They’re looking for a financial return. Tell them exactly how their money will be spent, when they can expect to make money and how you will make them that money while also making yourself a profit. They don’t need frills or fancy words. They need facts, firm plans and honesty.
- Get Ruffled
Investors can be an intimidating crowd. You’ll run into sharp-eyed sharks, kind-and-critical financiers and cantankerous naysayers. Know your facts, know your worth and don’t get too attached to the outcome. Instead of getting ruffled, view this as a learning process. If you fail, pick yourself up and keep going.
- Talk Too Much
When you’re intimidated or nervous, it can be easy to talk too much as a way of filling the awkward silence. Rather than coming off as nervous or jittery, take a deep breath after you’ve said what you needed to say. Step back with confidence and let your investors think for a few minutes and then smile and ask if they have any questions.
How to pitch a business idea boils down to the ability to communicate with common sense, critical thought and applicable information. You want to convince your investors that you know what you’re doing, that you’ve thought of alternatives and that you know your market. Give them the roadmap to their financial success and approach your business pitch with style and confidence.