If you can’t articulate the value of your business, it’s very hard for anyone else to see and understand the value of your business. They may just assume that your business holds no value. That’s one reason the savvy business owner likely has a 30-second elevator pitch on hand. This is great for chance encounters, small talk, meeting people at special events, and of course talking to someone in an elevator.
To bring on investors (or seek a business loan), however, you’ll need something a little meatier than a 30-second pitch.
The hit-show Shark Tank has its name for a reason. Investors devour weak pitches, leaving no remnants behind. While real-life, off-camera investor pitches (hopefully) look nothing like those on Shark Tank, the end-results are similar. Either you sufficiently show the investor there is value in your business or you don’t. To survive these dangerous waters, you’ll need a pretty fantastic pitch. In this post we give you a few tips on how to do that, but no matter what, keep this in mind – brevity is your friend.
Even if You Never Plan on Pitching to Investors, This Can Be a Great Exercise
Not planning on bringing in investments? It is still valuable to look at your business the way an investor would. It will push you to evaluate your true worth and growth potential. You might see weak points. You will be able to sell your services/products/etc. better.
So, how can you see if your business is Shark Tank worthy? Here are some tips:
Break it Down to the Most Basic Level
Many strong-willed entrepreneurs on Shark Tank leave both the Sharks and the viewers scratching their heads by asking for much more than they need or for being unwilling to accept what seemingly everyone else believes is a fair offer. When establishing your business, you need to start with the core concept. The basic idea. The minimum viable product. And you have to be brutally honest with yourself.
Now, once you have that, what’s the next growth point? Where could a shot of additional cash flow take you?
We all think we want explosive growth, but a natural, organic progression is generally much healthier, easier to manage, more attainable and more sustainable.
So press pause on a few of the crazier future ideas. Cut down on features/capabilities you don’t need. Simply put, remove the fat.
Ideas are Not Investable – Executed Plans Are
Want to get investors in on a business? You need an actual business. Everyone has ideas. The majority of those ideas will never become reality. That’s why investors generally only care about the concepts that have already been put into action.
That way, they can see that it works on some level. If something can’t work on a small scale, it can rarely work on a large scale.
Be an Expert About Your Business
You know who should know more about your business than you? No one. You should be the foremost expert about what your business is, what you do, where you’re going, how you react to situations, what you’re ultimately chasing after, and etc.
This means you’ll have to think through a lot of situations. You’ll need a great a business plan and key performance indicators (KPIs) to control and track progress.
It should go without saying that you should also care more about your business than anyone else.
Though you may be an expert when it comes to your business, you can’t be an expert on everything. There will be people out there who know more about business in general. They may know more about your industry. They’ll be better at some things than you are.
As a business owner, you need to learn humility – especially if you’re seeking investors. If you were the best at everything and smarter than everyone else in any given room, you wouldn’t need to be pitching to investors. They’d just throw money at you.
Focus Less on the Past and More on the Future
It’s great if your business has a nice little story about how it got started, but that’s not going to get anyone to invest in your business. Anytime someone making a pitch gets too caught up in their history, you can see investors getting bored and antsy.
They generally don’t care about how you started. They want to know where you’re going. They want to see that there’s a future. That’s the only way your business holds value to anyone.
Share the Numbers
Most of the time, the Sharks want to know what kind of sales a business is generating before they even consider an offer. They want actual numbers not speculation. However, depending on your situation, you might not have much in the revenue department yet.
That doesn’t mean you’re completely down and out. After all, Facebook got hundreds of millions of dollars before they were making any revenue. Then Facebook would go on to buy Instagram for $1 billion when Instagram was making zero money.
But in both of these cases, the apps had huge, highly engaged user bases.
For your business, you need to find a metric or two that can act as your trump card.
It Starts with Starting Your Business
As we said before, most investors won’t be interested until you have a business going. How do you go about doing that? You can start by reading Business is ART, on sale now. Next, you can watch my video series “Odds Makers”, online training, based on the book, and designed to help you increase your odds by developing plans and identifying KPIs that will impress any investor.
With our guidance, you can create a healthy, investible business.