New entrepreneurs have creative ideas that can change the world. The only thing that stands between them and their success is how to sell business ideas. Why do most entrepreneurs lack this basic business skill?
Pitching is a learned skill. Your commitment to learning will determine whether you win those contracts. You need to develop and practice your pitch. The pitch should be short, realistic, identifies a problem and shows how you solve it.
You can only implement your super idea if you have sufficient funding. In most cases, new entrepreneurs do not have the money; they need to approach investors to assist them in launching the projects.
Use the first three minutes to capture the attention of investors. If you fail to convince them in the first three minutes that deal is gone- go back to the drawing board, re-strategize, and pitch to another investor.
A perfect pitch will make the investor want to know more about your idea. They will ask questions about the project not addressed in the pitch. When you get to this point, you have won their hearts.
Features of a Perfect Pitch
A perfect pitch is planned and practiced. Before you approach venture capitalist or angel investors, check if your pitch has the following;
Identify a Problem
“Necessity is the mother of invention” so they say. You cannot create a product that does not address a need or solve a problem. Create an idea that will solve a problem in the market or fill a loophole. The problem should affect a good number of people to create a big market or be able to convince them they have a problem that needs a solution you are offering.
Give a Solution
Once you identify a problem, create a viable and affordable solution. The solution should ease their work and everyday life.
The problem is with the target market; it is your work as an entrepreneur to offer the solution. Most clients will not think they need a product because they do not know it exists, but if you can offer a product that will help them do daily tasks with ease, they will buy to the idea.
If your problem statement was convincing enough, it is easier to sell them the solution you have.
Have a real customer story that tells how your product changed their lives. Let the story remain real and touching. Be prepared with more than one testimonies.
The Target Market
Once you identify a problem, you should think of who the problem affects most. Before digital taxis, commuters had to wait for buses or use traditional taxis. With busy lives and job pressure, it was hectic. Garret Camp and Travis Kalanick saw how people are struggling to move from one place to another; they developed a taxi program and named it UberCab. The UberCab enables people with tight schedules to call a cab without wasting time to move around time looking for a cab.
The problem was not so dire, but the founders convinced the whole world the need to use their product.
Have background knowledge of what your target market needs and what they can afford. This information will inform the capital input and pricing of your product. You will project the profits and avoid losses.
One mistake entrepreneurs make to think they do not have completion. Maybe your product is the first of its kind in the market, but remember people are surviving without it.
The alternatives people are using are your competition. You need to ‘steal’ them from those alternatives. Before the invention of the first car, people used other modes of transport. Horses, trains, carts, trains etc. were competition for the first car. Therefore, define your competition and know how to convince clients of the importance of your product.
Once you identify your competition, you will offer better, cheaper or faster solutions.
Your Business Model
The business model should be clear on how you make profits, the profit margins, and revenue flow. Large profit margins will attract investors, and you will get the funding you need for your business.
If you can give your business an online presence, you will reach out to more people, hence, a more extensive customer base.
Prepare enough relevant data to back up your business model. No one will buy into a vague model.
The Company’s Vision
It is important to start a company with a vision. Make it clear to the investors how the company will reach each milestone, penetrate markets and stay afloat.
The company’s vision will keep you focused. The vision should be detailed and documented. The vision will make the investor buy your idea or leave it.
Most entrepreneurs who are seeking funding, they have a company that is already running. If you have not launched your idea, do not fret.
Check all the milestones you have achieved. Even preparing a business plan and having a company blueprint is a milestone worth showing. What matters is how you present it.
When you show the milestones to investors, they will see your commitment and likely buy your idea.
This is one feature that most entrepreneurs ignore. Having an exit strategy does not show fear, it shows you have confidence in your idea, and people can buy it.
Research similar businesses that preceded you, ho they grew, the mergers they had, and how they sold the businesses. Investors look at the exit strategy as security for their investment.
An exit strategy does not necessarily mean selling the company. You can have a detailed succession plan because you will not be in the business forever.
Succession plans ensure that the business will continue running even after your abrupt exit through chronic illness, incapacitation or death.
Your pitch should end with a question opening up a discussion. The conversation that arises from the question will lead to the closing of a deal.
How to Present a Pitch to Investors
After preparing your pitch, how you present it to investors’ matters. You may have a great pitch, but your presentation skills fail you. The following tips will help you win the funding through your pitch.
Tell Your Pitch as a Story
Stories are hard to forget. When you tell your pith in the form of a story, most of your audience will remember it.
The story will keep the audience engaged and entertained. An alert audience will capture the necessary information while a bored audience will miss out on important points.
Choose the Right Audience
One mistake of an entrepreneur is to overlook the interests of an investor. Some investors are interested in the transport industry, pitching them on an idea on software engineering when that software does not solve the transport problem would be a waste of time.
Do a background check of their interests, and it will save you on time. Having the right audience gives you a greater chance of closing a deal.
Make the Pitch Simple and Incisive
There is a misconception that when you use jargon and vocabulary, you will appear smart. That is not the case. Investors are looking to understand what you have to offer.
Remember to keep the language simple. Avoid jargon and tech words. You want to make it as memorable as possible. Avoid the spreadsheets and graphs; they are important for your business, but not appropriate for pitching. Can a kid understand your pitch? That is what the investors are looking for- a simple but incisive pitch.
Business is all about timelines. If you do not deliver quality products in the shortest time, your competitors will.
Include timelines for your intended milestones in the pitch. It shows how serious you are about your business. Do not forget to give the investors a timeline. No investor wants to lose a great business idea to another investor. The timelines will make them arrive at a decision faster, giving you a chance to access the funding early.
Tell About the Sales
Most investors want to invest their money in projects that will give them good returns. Showing them the number of sales within a specific timeline will enlighten them on the market demand. They will invest in a product that has a ready and vibrant market.
Have a clear picture of how you intend to maintain the market. Explain to investors how you will face future competition and changing market dynamics.
Present the Pitch with Courage
You will be nervous during the presentation if you do not prepare well. Tell the investors about the loopholes in the market and how you intend to take advantage of them.
Be confident when you are explaining the details; do not rush when presenting. Let them consume every single detail. When faced with a question, answer it in details. The confidence will win their trust- they will see you know what you are doing.
Conclusion on The Perfect Pitch: a Guide on How to Sell Business Ideas
Above are the simple tips on How to sell business ideas. If new entrepreneurs take them seriously, they will be able to launch and expand their ventures.
Follow and practice each of the tips in your future pitching. You will have a testimony to tell your peers.