How to Pitch a Business Idea to Investors: A Simple GuidePhoto by Adeolu Eletu

Originally Posted On: https://www.myfrugalbusiness.com/2020/05/how-to-pitch-a-business-idea-to-investors.html

 

We live in the age of entrepreneurship. Nearly 627,000 startups form every year. Clearly, there’s a lot of opportunities for people looking to start their own business.

However, before you can get your company off the ground and start making a name for yourself, you have to get financed. There are multiple ways to get the money you need to start your business, but looking to investors is becoming increasingly popular, especially for those who don’t qualify for traditional business loans.

To make the biggest impact, keep reading for our top tips on how to pitch a business idea to investors.

1. Do Your Homework

First, when pitching a business idea, make sure you know your industry. Whether you’re entering into retail clothing, the fitness arena, or general contracting, you have to do your homework. This is known as market research.

Your market research needs to cover:

  • Market saturation -What is your competition?
  • Growth potential – With the right marketing and management, what is your company’s potential for growth?
  • Industry trends – What is the demand for your products or services and what’s trending?
  • Cost Analysis – What will be your expenses and projected earnings?
  • Target Audience – What demographic of people will use your products or services?

The importance of market research when planning how to pitch a business idea to investors can’t be overstated.

2. Be Practical

Next, learning how to pitch a business idea means getting investors excited. What are they going to get out of it? While you may be tempted to dream big (and you should), your presentation should remain practical.

Feel free to talk about the potentiality of success, but stay grounded. Your investors need to know that you’re being realistic and honest with them as well as with yourself. Talking about making millions in the first year may only result in losing credibility among potential investors.

3. Present the Information Clearly and Concisely

When you pitch your idea to potential investors, it helps to use visual aids, such as PowerPoint Graph Animations, charts, infographics, and more.

We process visual information much faster than text, which can prove to be more compelling.

Additionally, presenting graphs to your potential investors will also demonstrate your thoroughness as well as keep them more engaged.

4. Start Small

As excited as you are to get your business off the ground and start growing, learning how to pitch a business idea successfully means knowing how to demonstrate a minimization of risk. Start small to keep overhead costs down and avoid scaring away otherwise interested investors.

After you’ve started your business and proven it as a viable company, you can petition your investors (or new ones) for more money to expand.

5. Focus on How Your Company Will Grow

When you pitch ideas, talking about an amazing growth potential is all well and good, but without a plan of action to achieve those goals, investors won’t have much to go on. You need to focus your presentation on the “how” behind the “what.”

Investors need to believe in you before they can believe in your company. Improve your credibility by showing them that you’ve done the research and you know how to make your business a success.

Present a step-by-step plan that will lead to high sales numbers, repeat customers, client retention, and return on investment.

Looking for More Information on How to Pitch a Business Idea?

There’s a lot more to running a successful business than getting financing for a startup. After you’ve learned how to pitch a business idea to investors, you’ve only just begun.

If you’re looking for more advice and information on pitching ideas, cutting costs, and making good business decisions, be sure to check out some of our other articles before you go. For more insight on how to pitch a business idea to investors and close the deal, visit the Sales and Finance sections of the Bootstrap Business Blog right now.