Small businesses are big business in the United States, employing 58 million people. That's nearly half of the private workforce: 540,000 people start a new business every month.
If you're hoping to join that group of people, you know it takes money to start and money to operate. 83% of small businesses fail because of cash flow problems.
Investors are critical for the success of most small businesses, and attracting those investors can be challenging. We've put together 5 pieces of investor pitch ideas to help you succeed.
1. Be Specific About Your Product or Service
It sounds obvious, but not everyone can explain their business to investors. Be as specific as possible. What problem exists, and how does your product or service solve it?
Whenever possible, have a product available for the investor to see and touch. It can be difficult for an investor to see your vision for what could be. Better to show the money people what is.
2. Watch Your Time
Investors are busy people, and the longer you take to make your pitch, the more likely it is that you'll lose your audience. A good rule of thumb is to come in 5 minutes under the time allotted.
So, if you have 15 minutes to pitch your product, create a 10-minute presentation. Time management is essential for a couple of reasons. It demonstrates your respect for an investor's time. And, it forces you to get very specific, very quickly.
Practice your pitch with a timer. You'll find out pretty quickly where you're going long, and where you can tighten things up.
3. Tell a Story in Your Investor Pitch
Imagine yourself as an investor who sits through dozens of pitches every month. Would you enjoy watching a PowerPoint and sifting through page after page of spreadsheets? Wouldn't you rather hear someone's story?
The key to any successful pitch is to make an emotional connection with your audience. Let the investors know to get to know you through your story. Where did you get your business idea? Why are you passionate about your product?
4. Show Them the Money
You don't have to shower them with cash literally, but you do need to explain in detail how they're going to make money. Investors don't invest because they like you and think you're a neat person. They want to make money, just like you do.
Walk them through your revenue model and explain your business plan. Remember to include your marketing strategy, so your potential investor will understand how you plan to attract customers. If you've already had success with a social media marketing plan, show it to them.
Include any intellectual property you have, like a patent. This demonstrates that you've already planned for a successful product and have protected your idea.
5. Anticipate Questions and Have Prepared Answers
When you're practicing your pitch and timing it, you might ask a friend or business associate to weigh in. Ask them to ask questions - the more, the better. You want to be able to answer any question an investor might throw at you. Another set of eyes and ears on your presentation can help with this.
Sometimes we're so close to our business that we miss the obvious, and a trusted friend or colleague can help ferret out the missing pieces.
Wrapping It Up
Before you deliver your investor pitch, you want to make sure you're pitching to the right people. Do some research on potential investors to make sure you're meeting with the appropriate people for your business.
Once your pitch is perfect, we encourage you to apply with us. We connect entrepreneurs with investors through our network of companies and organizations. You can read more about our process and apply here.