By DeVry University
Starting a small business can be a fun and exciting way to chart your own destiny – but you might wonder how you can put together the financial support you need to turn your small business ideas into reality. Fortunately, there are investors and partners out there interested in funding new business ideas that are well thought out, fill a need in the market and have a reasonable chance for success.
How can you ask others to come on board and help you start your small business? For that, you will need a pitch deck, sometimes known as a pitch plan. Here’s how to put one together.
What Is a Pitch Deck?
A pitch deck is simply a slide presentation that lets you share your business concept with potential investors. You’ll typically have only a few minutes to explain all of your small business ideas at a startup event, so the pitch deck needs to be tightly focused and to the point. It needs to answer the fundamental questions that investors have about your company.
What's The Difference Between a Pitch Deck and a Business Plan?
Most pitch decks consist of approximately 10 slides, while a business plan can run to 50 pages or more. Think of the business plan as a detailed and comprehensive explanation of all aspects of your company, while the pitch deck is a tightly edited “teaser” that hits the broad points in a more concise way.
What Should a Pitch Deck Include?
Every pitch deck is unique because no two businesses are identical. But nearly all effective pitch decks follow the same basic flow. You can change the order or add an extra slide or two, but the slides detailed below are crucial to include:
- Overview: In one sentence, what is your business about? What does it do that’s new and different? Create a catchy, memorable sentence that can ultimately become your mission statement and form the core of your branding.
- Problem: Define the problem that your small business solves. Remember, it’s not enough to simply have cool new business ideas. For investors to take you on, you need to show that your idea actually solves a real problem or provides a necessary service. This can be tricky in areas like the arts, for example, but maybe the problem is that there isn’t enough entertainment in your community or your theater troupe’s mission is to address a specific social justice issue. Don’t be afraid to think outside the box.
- Solution: How does your small business solve the identified problem? Don’t get wrapped up in is describing all the features of your product or service. Instead, forget the features and focus on the benefits. How does your small business help people solve the identified problem?
- Your story: Every small business owner has a story. How did you come up with this idea? What happened in your life to make you realize there was a problem and how did you decide that your solution is the best one? Get personal here, but keep it tightly focused to the rest of the pitch.
- Timing: Why now? Why should this business happen today, as opposed to next year or in 10 years? Include some information about the market into this slide. How big is the group of people looking for a solution to the identified problem, and why do they need that solution now?
- Validation: If you’ve already started your business, you can use your own data for this slide. How many customers do you have? What percentage come back more than once? How much do they spend each time? If you’re still at the idea stage, you’ll need to do some market research. You can do this by developing a quick prototype of your idea that you refine through focus groups with your target audience, and then sell to members of those groups. This gives you real sales to reference, without the expense of fully realizing your idea before you get investors.
- Market: Investors care about three different metrics for measuring your market. The Total Available Market (TAM) is the entire pool of people in the world who could theoretically benefit from your product or service. The Serviceable Available Market (SAM) is the total number of people you could realistically expect to serve. The Serviceable Obtainable Market (SOM) is the total number of people you expect to capture within a given timeframe, such as 5 years.
- Competition: A common mistake is to assume that there is no competition for your product or service. You’re doing something different and presumably better than your competitors, but that doesn’t mean they don’t exist. For example, Airbnb entered the market as a direct alternative to hotels. Uber began as an alternative to taxis. Just because no one is doing exactly what you do, doesn’t mean that there aren’t other solutions to the identified problem out there. Find them and discuss them.
- Competitive advantage: After defining your competition, the next slide should talk about what you do that’s different and better. What makes your solution superior? You can mention a few features at this point, but your focus should remain on user benefits. How does your solution help users more than the other solutions that are already out there?
- Team: Investors want to know how you’ll build your team to help you run your business. List your core team members with a brief description of their roles and background. If you’ve yet to hire employees, be sure to outline the types of roles you plan to fill.
- The ask: The whole point of a pitch deck is to get people to invest in your business. You’ll need to step up and ask for the money you need (or perhaps a bit more). Provide an exact dollar figure and explain what you’ll do with it. Marketing? Research and design? Cash flow for the first year of operations? Know your numbers, understand what you need and sell it.
Building a pitch deck requires you to focus your small business ideas. Zoom in from the sweeping generalizations to the specific points you need to hit in order to make your business a reality. The more successful you are with your pitch deck, the more likely you are to attract the interest of investors and the easier it will be to write your more detailed business plan.
Are You Ready to Pursue Your Small Business Goals?
A business degree can help you get started on the road toward making your small business dreams a reality. At DeVry, we offer a Small Business Management and Entrepreneurship Bachelor's Degree Specialization, a Graduate Certificate in Entrepreneurship and an MBA with a Specialization in Entrepreneurship. And we’re committed to your success. From academic tutoring to personalized faculty mentoring, we’ll do everything we can to support you as you take the next steps into your future.