A business pitch or elevator pitch is not only a crucial tool for getting investment, it’s also one of the best tools you can use to flesh out your business concept, iterate it through different variations, and find a business model that works and will turn into a profitable company.
But, shouldn’t you have a solid business plan before you build a pitch? I don’t think so. If you think of your pitch as a tool to develop strategy instead of just a vehicle for selling ideas to investors, you’ll find that there are many reasons why you should start with your pitch and develop a formal business plan (if you need one) later.
This is not to say that you shouldn’t have a plan. This would be like trying to go on a trip without a map. The problem is that a traditional business plan just isn’t the right format to flesh out your initial business strategy. The problem with business plans isn’t the the planning process, but the format of the output.
Here are 7 reasons why you should develop a 1 page pitch before you start planning:
1. Building a pitch is way faster than writing a business plan
Instead of slogging away for hours or even days on a formal business plan document, a pitch lets you get your ideas down quickly into a simple, one page format. Think of your pitch as just one step up from the proverbial napkin sketch of your business idea.
2. A pitch is easier to to get feedback on
If you want to get feedback from business partners, colleagues, potential customers, or your spouse, the quickest way to share your business concept with them is with a one page pitch. If you don’t like the idea of a one page pitch, you could accomplish the same goals with a presentation. Either way, when you’re asking for feedback, you want something short and concise that communicates your ideas quickly.
A short pitch is more likely to be read and reviewed and you’re more likely to get feedback from this process than if you dropped off an in-depth thesis that will take significant time to read and digest.
3. Pitches are easy to update
As you get feedback, you’ll need to iterate and revise your business concept. Entrepreneurs never get things right the first time and you’ll be constantly learning as you talk to potential customers and business partners. Instead of updating a large document every time you discover something new, updating a one-page pitch only takes a few minutes.
4. Pitches are direct and to-the-point
A good pitch lets you see your entire business concept on a single page which forces you to be succinct. Learning to communicate your ideas clearly and directly is critical so that you, and others, can really understand the essence of your business.
5. A pitch is a list of your assumptions that need validating
When you first start, your business concept is really just a set of assumptions that you need to validate. Do your potential customers have the problem you assume they have? Do they like your solution and are they willing to pay for it? What marketing and sales tactics will work?
As you validate these assumptions, you leave them in as part of your pitch. Other assumptions that end up being wrong will fall off the page quickly.
6. Your pitch will serve as the outline or backbone of your detailed plan
And by “detailed” I don’t mean “long.” If you do need to create a detailed business plan document for investors or business partners, you can use your one page pitch as your core outline. The plan document will just expand and provide more detail on each section of the pitch—detail that you aren’t able to fit on a single page but that is important to share with readers of your plan.
7. No one really reads long business plans
A common problem with business plan documents is that they are too long and too detailed. Even when investors ask for a detailed plan document, chances are that they won’t actually read every word. They may read certain sections, but more likely than not, they just want to see if you’ve thought through the details of your business, how it will operate, and how it will grow.
Here is what a one page pitch looks like:
The image here is from LivePlan, but you could certainly do something like this on your own.
Of course, there may be a time when you need a formal business plan document. Lenders and investors might ask for one. Also, a more detailed plan helps keep your team on the same page and can be used to flesh out more details of your business model, go to market strategy, marketing and sales plans, and product details.
But, save yourself a bunch of time and effort and start with your pitch first. It will eventually serve as the outline of a more thorough business plan when you need to create one.
Do you agree? Disagree? Let me know in the comments.
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