Business Plans and Pitch Decks are the bread and butter for any fundraising attempt. While frequently grouped together, they are two separate means of communications, and serve different purposes. If you’re trying to raise funds, you should prepare both. But it’s important to know which is which, and when to use which.
The short version is that the pitch deck is a highlight reel of your business plan. Now for the long version:
The Business Plan
We’ll start with the business plan first because that’s a bit more complicated. We’ve talked before about what should how to write a business plan. If you’ve paid attention to that, you’re business plan will look something like this:
- Company Overview — who/what your company is, the problem(s) you’re trying to solve, an explanation of the problem the company is trying to solve, and the company’s vision & mission statement
- Market Analysis — a thorough analysis of the industry, your target market, and your competitors, followed by a highlight of your competitive advantages
- Product/Service Description — an in-depth study of your product portfolio, and how these products serve the needs/problems you mentioned in the previous chapters
- Management Team — Who you are, and who the rest of your team is, and why you’re the best people for the job
- Marketing Overview — how will you inform people about your company, and how will you get them to use your products
- Financial Data — costs, revenues, and financial metrics
- Risks — what risks do you foresee, and how will you manage those risks
The bottom line is, the business plan gets into all the nitty-gritty details of your business, from technical specifications, to value chains, to customer profiles. It’s all in the name: a business plan is a plan to run the business, everything you need to know to run the business should be in it.
The Pitch Deck
Now a pitch deck is an entirely different thing altogether. A pitch deck is not a business plan. A pitch deck is what you use to present your core idea to someone who knows nothing about it – a more detailed elevator pitch if you will. So you stick to what it is, and why it’s unique, capable of succeeding where others have failed, capable of dethroning current market leader (or whatever the immediate goal is), and worthy of investment. If you’ve followed our Pitch Deck guide, your pitch deck should have the following:
- Vision: an explanation of why you’re doing this and what it would look like in 10/20 years
- Market Opportunity: The problems/needs in the market you’re addressing
- Product/Service: How your idea actually works, will it really solve any of the problems stated
- Revenue Model: how will you make money, how much money
- Marketing & Growth Strategy: how will you get traction, how will you grow
- Team: who are you and why you are the best people for the job
- Competition: who are you going up against, why do you think you’ll win
- The Close: why am I seeing this, what do you need
See the difference? The pitch is more of an eagle eyed view of your business, a business plan teaser if you will. You use a pitch to get the viewers interested in reading the business plan. You use the business plan to educate the readers on how to run the actual business. The business plan is developed first, but the pitch is delivered first.
The trick is balance. The pitch deck should contain information from your business plan (i.e. nothing new), but should be presented in an exciting and easy to understand way. It should also be short enough to be deliverable in 20 minutes. If you’ve done it right the viewer will be interested enough to sit around for twice that long and discuss details with you. So think of the pitch as a way to earn a conversation with your audience.
There you have it. Please don’t get it wrong again. Plenty of good ideas have been thrown aside because the venture capitalist needed a business pitch and the would-be entrepreneur showed up with a full business plan (at least have some highlights ready to share). Or the time the venture capitalists were convinced they should take a deeper look at the business and asked for a plan, only to have the would-be entrepreneur email them the same pitch they just saw. I cringe every time I see this happening, because it speaks directly about your capabilities as an entrepreneur and a manager. You want to succeed. We want you to succeed. Success requires you know these differences.