Opinions expressed by Entrepreneur contributors are their own.
When entrepreneurs try to shore up funding and management for their ventures, they often summarize their business strategies in an abbreviated presentation document called a pitch deck. A pitch deck is typically utilized in meetings with clients, partners and co-founders and when presenting to investors.
There are two things to remember when creating a pitch deck to attract and interest potential funders. Your pitch deck’s visual appeal (including the text length of each slide) is the first element. The second element is the actual content of your pitch deck, which is critical and challenging to create.
1. Vision statement and value proposition
Whether they’re on the same slide or are presented separately, each of these needs to be one short sentence or statement. These statements will show prospective investors what your firm does and the value it can bring to consumers. It’s a general rule that these statements must be both clever and concise.
2. Problem statement
If your company isn’t addressing a compelling, pressing problem, something’s wrong. Explain the issue your company is managing and who this issue affects (i.e., your target market). When describing the case, it’s essential to tell a story that prospective investors can identify with. This will aid in conveying the nature and purpose of your company.
3. Target audience and market opportunity
You can use this section to elaborate on your target market and the size of your estimated customer base. Explain to potential investors how big the market is and where you want to position your company.
Collect as much data as possible on existing market purchases to give investors an accurate market size. If necessary, split your market into segments.
While you might be tempted to define your target market as extremely broad, you should show investors you have a particular and addressable market. Doing so will add credibility to your presentation.
4. Product — Show the solution
At last, you can describe the product or service you’re bringing to the market. Explain to potential customers who use your product or service how it solves the issues you highlighted in the second section above.
Describing your business here builds up the problem and allows you to define how acute or painful it is for your target market. Then, you can tell how your product or service can come to the rescue to solve (or help solve) the problem.
Whenever possible, use pictures and stories to describe your solution. Showing is almost always better than telling.
5. Business model or revenue model
After introducing your product or service, you should discuss its potential advantages and benefits. Some ventures rely on advertising revenue rather than consumer purchases to cover their business overhead and profit. Therefore, make sure you provide some explanation of the financial mechanics here.
6. Sales and marketing approach
How will you advertise your company and attract new customers? Use this section to show investors how you intend to promote and sell your product or service. Ensure you include all the advertising and sales methods used to introduce and demonstrate your wares to consumers. You should also emphasize your unique selling points (USPs) here if you have any.
7. The money
Investors need to see sales, profits, and cash flow projections for at least three years. Use charts to display sales, estimated customer numbers, expenditure summaries, and profit projections rather than detailed, difficult-to-read spreadsheets.
Get ready to talk about the primary expense drivers and the assumptions you used to arrive at your sales projections. Keep in mind that your financial forecasts should be logical and reasonable.
Present the team you intend to use for your venture, along with their background, qualifications and anything special they bring to the table that would make them especially suitable for their roles. A solid team will enhance your chances of success and give your company much-needed credibility.
Even though the elements above are crucial, a “competition” section is also recommended for a successful pitch deck in most cases. In this section, justify your place in the market and explain how your business can stand out from the rest of the options that will be there. Focus on the USPs that set your company apart from competitors.
A “Investment and the Use of Funds” section can also be included. In this section, you should tell prospective backers how much money you need and why. Describe precisely how their investment will be used. Investors want to know where their money is going and how it will further your company’s mission.