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Corporate Commentary

The Purpose of Developing a Business Pitch

Brainstorming

Convincing investors to invest their money in a business is one of the most challenging tasks faced by sales teams. The team must develop a business pitch that combines persuasive selling techniques with highly detailed research to win hard-nosed investors over.

To create a strong business pitch, it is essential to tick all the boxes. To help you through this process, this post will share the most important elements required for developing a business pitch from audience-advantage.com who create advanced sales presentation software.

What is a business pitch?

A business pitch is a presentation where a sales team must convince an investor or group of investors to invest their capital in a business. Business pitches can come in many forms, including conversations, formal meetings, emails, letters, and slide presentations.

There are several types of business pitches designed for specific environments including:

  • Elevator pitch: This is a business pitch short enough to take place during an elevator ride. If performed well, it will result in an additional meeting or phone call where the salesperson can give the investor more detail over the investment opportunity on offer.
  • Live plan pitch: The live plan pitch relies on visual aids instead of a spoken presentation. A salesperson will give investors all of the information they might require to make an initial assessment of a business, in written form. This might include a market summary, financial data, business objectives, and legislative hurdles. The investor can then make a decision about whether they want to learn more.
  • Presentation pitch: This typical involves a salesperson running investors through a presentation that explains what the business does, how much money it makes, what challenges it faces and so on. The investors can ask questions of the salesperson to clarify certain parts of the presentation.

What is the purpose of developing a business pitch?

The goal of a business pitch is either to attract an investor’s attention (to get an additional meeting) or to outline the investment opportunity that is available (a full presentation pitch or live plan pitch). The main objectives during a full business pitch include:

Identifying customer needs (the problem)

The pitch should identify the unfulfilled customer needs which the business will be fulfilling. There are many types of customer needs including:

  • Functionality
  • Convenience
  • Design
  • Reliability and efficiency
  • Compatibility
  • Price

The sales team will explain how customers are unhappy with current market offerings or that they would be receptive to a new product or service. This is usually used to setup the main pitch for the business.

In many cases, the best way to identify unmet customer needs is to share a story. A salesperson can tell the investors about an experience that a customer has had when using the business or share a customer testimonial.

Explaining what the business does (the solution)

During the business pitch, the sales team must explain how the business fulfils customer needs and solves their problem (as mentioned earlier). Perhaps the business’ product is much more reliable than other solutions or it has innovative functionality that hasn’t been seen before. Maybe the business has developed a new manufacturing process that lets it produce it at a lower cost than competitors.

Who has created the business

Another common purpose of a business pitch is to share the background detail of the owners of the business. This gives investors additional certainty about the likely success of the enterprise.

Business model

The presentation should include details of the business model that the enterprise will using to provide this solution to consumers. This information will help the investors determine how the business will function in the real world. It usually includes information like:

  • The plan for the successful operation of a business
  • The sales strategy (direct sales, franchising, online only, advertising-based)
  • How it will make a profit
  • Current sources of revenue
  • The intended customer base
  • Current product range
  • How and where the product is made
  • Details of financing

Industry analysis

An industry analysis assesses the current business environment faced by the enterprise. The level of detail that you go into will be based upon the type of business pitch you are delivering, how much time you have, and what the investor expects.

Some of the typical questions answered by an industry analysis include: Is the industry growing? By how much? Are there any regulatory hurdles which create risk or opportunity? How many competitors are there? Is it difficult to enter the industry? Does the business have any significant competitive advantages?

Marketing strategy

Another purpose of a business pitch is to share the business’ marketing strategy with the investor. How much of a budget will the business need for marketing? What marketing strategies will be used and so on.

Risks

There will always be risks involved with starting a business. Investors will uncover most risks when performing due diligence on a business, so it’s always best to be upfront about them during a presentation. Another purpose of the business pitch will be to share these risks and explain how the business will ameliorate their effect.

Implementation plan

The business pitch should also be used to share the implementation plan with investors. How long will it take to get the product to market? When does manufacturing start? Which marketing firm has the business hired? What is the launch date?

Financial projection

Another important purpose of the business pitch is to provide investors with financial projections. These projections should include figures like sales growth, market expansion, demand growth, estimated total profit and so on.

Financial needs

Finally, every business pitch should explain how much capital the business needs from the investor — and what they get in return.


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Alexandra Dimitropoulou
Deputy executive editor at the ​CEOWORLD magazine. Writer, internet person, professional restaurant recommender, and native New Yorker. Passions: health & wellness, coffee, running & dogs.
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