For budding entrepreneurs, it is often difficult to secure enough capital on their own to start their business. In most cases they must rope in investors to provide the funding. However, investors are hard to come by, and even when they do they can be quite picky and difficult to satisfy. Thus, when you get an opportunity like this you would want to make the best first impression.
Here are the top 7 tips for presenting your business plan to your investors:
- Doing Your Homework
It goes without saying that you need to prepare for all kinds of questions that your investors might ask. Failing to answer any of their questions appropriately will only push you one step back in gaining their confidence.
Thus, researching and studying in advance is the key. The problem is- how much? It is best to cover as many topics as possible, rather than perfecting just one segment only. You only need to be aware of all aspects of your future business, rather than have mastery on one.
You can narrow down the areas by asking yourself “what are things that are important for my investors in this business?”. You may also have limited time on hand, so divide it appropriately.
- ‘Eating the Frog’
Brian Tracy discussed a very helpful tip on time management in his book “Eat That Frog!”. The crux of it is that once you have taken care of the most difficult tasks first, things become easier afterwards.
The same advice can be applied for pitching your business plan to investors. Make sure you get the answers to the most difficult questions first, and then proceed to the fun questions.
Estimating the lifetime value of your customers, calculating the acquiring cost of customers, coming up with effective marketing strategies, these all can take a good deal of time, and can be boring. However, once you have clear answers to these tough questions you will gain confidence, and it will reflect in your presentation.
- Starting off With a Customer Story
Now that you have done your homework and informed yourself on all the important questions, you can polish your presentation skills. One of the best ways to interest an investor is to use a real customer story, rather than involving artificial buzz words and technical jargon in an effort to create a good impression. The more real and simple your presentation is, the more likely you are to win the confidence of investors. Tell them how you came up with the business idea, and how it has already changed the lives of the people who used it.
- Talk About Competition
Most amateur entrepreneurs make the terrible mistake of telling their investors they don’t have any competition at all. There is no such thing, for everyone has competition to some extent. If you will shy from it, your investors will mention a few themselves, and then you will be racking your brain for answers.
Thus, it is better to find out as much as possible about your competition and figure out strategies how you will be able to beat them. When you give the presentation bring up the topic yourself and show your investors how you plan on acquiring the market share of your competition. However, don’t be vague, and give then concrete strategies, with timelines and numbers. This will reflect your credibility.
- Understanding the Timing
Time is of essence when you are giving a presentation to investors who value every second of their time. Thus, it is important to keep your presentation as brief as possible. Here are a few pointers to help you with the timing:
- If you have announced you will be taking just X minutes of their time, then take X-1 minutes, or even less.
- If your investors tell, you have only X minutes, then make it X-5 minutes or less.
- If you are using slides, then don’t linger on any slide for more than 3 minutes.
- Keep your pace consistent, and don’t try to rush things.
Most good presentation don’t take more than ten minutes. So, make sure yours doesn’t either.
- Explain The Revenue Model
Investors invest to make more money. Thus, if there is one thing you need to master, it is the revenue model. Get all numbers on it and explain it well to your investors. If you are able to convince them how they will be able to get returns on their investment, your job is half-done. However, be clear and meticulous in your explanation.
- Show Your Passion But Also Listen
Many times, an investor may have doubts about the business, but they still get on board, just because they want to invest in the entrepreneur. This is made possible through sheer passion. When you show how far you are willing to go for your business, you can nudge your investors in the right direction. However, if you are presented rough remarks don’t take them to your heart. Your investors may know about how a business works, so accept their comments humbly, and state your point.
Presenting a business plan may easily be one of the biggest challenges you have to face as an entrepreneur. However, if you prepare well in advance you can easily convince an investor to fund your business.
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