If you’ve never written a business plan or created a pitch deck before, determining when these documents are completed correctly without a clear reference point of industry expectations is a challenge. You either overshoot it by putting too much detail and end up with a 100-page business plan that completely loses its readers, or don’t take it seriously enough and deliver an underwhelming pitch presentation. Below is a summary of the most common principles that I see entrepreneurs violate when crafting their business plans and pitch decks and how you can avoid the same mistakes.
Pitch Decks Are Teasers
Pitch decks are usually teasers for investors, and should not play the role of a business plan. If your pitch deck has more than 15 slides and 5 sentences per slide with text occupying the majority of the slide, it’s time to revamp your deck! A pitch deck should largely serve as a vehicle for a verbal presentation, or as a summary intended to entice the right investors. If an investor is ready to learn more about your business after watching your presentation, they’ll ask for the full business plan, or for a meeting to discuss your startup further. A pitch deck is simply a stepping stone to give the green light for further engagement and conversation. So to craft a great pitch deck, keep it simple and focus on sharing the best hits of your business.
Business Plans Are Narratives
There are no new business ideas anymore, and we are entering an age where businesses are either a hybrid of two different ideas (Facebook), or simply a disruptor of an outdated or monopolized industry (Warby Parker). Therefore, business plans that give a flat presentation of market data and numbers to describe a business do not stand out. A business plan with a cohesive and strong narrative as to why one’s vision of their business will be a hit with its target customers is absolutely necessary, and the meat of the plan. Vision and the person delivering that vision are what wins over investors, not ideas. To craft a fantastic business plan, stick to one narrative about your business and focus on crafting all the data, market research, and strategies to confirm it.
Unfounded Assumptions Kill Business Plans
Another common mistake I see in business plans is the introduction of opinion-based assumptions that are not backed by market data or trend reports. When discussing the problem that a business is tackling through its product or service solution, it is important for this problem to be supported by market trends and actual consumer behaviors in order for the line of reasoning for a business’ viability to be sound.
For example, it is much more of a convincing argument to say that your business helps millennial families plan exciting travel itineraries because they are the leading driver of growth in the travel industry, love adventure travel, and spend almost $7K per year on traveling, rather than saying that your business helps young families plan exciting travel itineraries because existing travel agencies do not know how to plan travel for young people.
The second statement is opinion-based, and can largely be refuted or questioned. To avoid this common pitfall, look through your business plan and every time you approach an assumption, ask yourself, ‘Is this a fact, or is it an opinion?’ If the statement is a fact, make sure to add a reference point or a sentence detailing the data you’re basing your assumption on.
Don’t Get Caught Up In Technical Details
Companies that sell hardware or software solutions or sell a product with an extensive manufacturing process can easily lose its business plan or pitch deck audiences by detailing extraneous technical details about how a product works or is made. The purpose of investor documents is to convince its audience of the viability of the business, and not so much the ABCs of how the product is pieced together. Proprietary information and features that provide a competitive edge should absolutely be shared, but any technical details that do not contribute to confirming the business’ feasibility can be too much information and navigate the reader away from the documents’ core purpose. Save the technical details for in-person meetings, interviews, and due diligence phases which are usually the formats during which these types of questions are asked.
Push Additional Information To The Appendix
Trailing the previous point, a business plan and pitch deck should serve the core purpose of proving the business’ viability for its market. Any additional information that is ‘nice to have’ but not completely aligned with the core purpose of the business plan and pitch deck should be pushed to the Appendix section of a business plan where the reader can choose to digest this additional information at will.
When presenting a business plan or a pitch deck, remember that you are telling a story of your unique vision. There’s nothing more disruptive to a great story than a bunch of tables, graphs, historical context, and images that snap the reader out of the world your story is creating.
Want to write a business plan that wows investors? I have a tool for that.