4 Tips for Nonprofits to Secure Business Partnerships

A business is a business, and that’s something many nonprofits tend to forget. No matter the type of change you hope to create in the world, a nonprofit is still a business — one that requires not only a business plan and all that entails (think market analysis, financial projections, implementation strategy, and so on), but also a full understanding of business principles.

If you want to make a lasting impact, remember that it’s rare to do so single-handedly, and partnering with for-profit businesses becomes an essential component to achieving more than just fundraising goals. Even a single partnership with a small local business can provide a nonprofit with shrewd insights it might otherwise go without.

Of course, approaching businesses about a possible partnership can be a struggle — especially for organizations new to the nonprofit space. But it’s not impossible, you just need the right strategy.

Weighing your partnership options

It’s sometimes difficult for a nonprofit’s development team to determine exactly how a business partnership might fit with the overall strategy (beyond the potential to raise funds, of course).

If you were a coach, you’d want to play to each team member’s strengths. Sometimes, these strengths aren’t always apparent, and it takes time and a keen eye to scout out how a business might be an asset to your charitable organization. Perhaps even more important, though, is determining how your nonprofit can be of help to your array of potential business partners.

Recent research found that a business’s charitable giving affects 73% of consumer purchase decisions, so that’s one angle to take when pitching business partnerships with nonprofits. Not to mention 50% of consumers say they’d switch to a brand that supports causes they align with. There’s another angle to approach with.

Even then, however, it can be difficult to find businesses willing to contribute to your mission. When it comes to business partnerships with nonprofits, there has to be a commonality between both parties to move past the ask and develop an actual relationship. 

The question then is: How exactly do nonprofit and for-profit businesses meet in the middle?

Development Ideas for Nonprofits

Even though you’ll have to do some legwork up front, it’s possible to find like-minded businesses in your area that want to start partnerships and contribute to your cause in some way. After all, most businesses these days seek out more ways to contribute to their local communities.

As a general rule of thumb, consider the following tips to determine where you should focus your efforts first:

1. Identify businesses with shared values 

Any business practicing social responsibility commits to a select few social, cultural, or environmental issues, and these are often based on its core values. If these values align with the core mission of your nonprofit, you’re more likely to reap positive results.

Research small to midsize businesses in your area. Chances are good they haven’t been approached by other nonprofits. You can glean a lot of information from their websites: About pages will usually contain information about their mission, values, and past philanthropic activities, and team pages should give you some idea of who to talk to.

2. Communicate clear win-wins

Partnerships should always be mutually beneficial, and that’s still true when it comes to business-nonprofit partnerships. Besides detailing how your organization makes a direct impact on the local community, highlight what a partnership could mean for the businesses you’d like to work with.

Remember that one of the main benefits of partnering with a nonprofit is marketing. A purpose-driven business does have a competitive advantage because more and more people now buy goods and services from businesses that reflect their values.

Yet another benefit of partnering with a nonprofit is how that partnership can support employee retention and recruitment efforts. Most people prefer to work for companies that share their values; in fact, 87% of people rate the pride they have in their workplaces as very important, and 46% value a company’s ability to impact society positively.

In other words, emphasize the mutual benefits for both parties and share how your nonprofit supports its supporters. Is it through employee volunteer opportunities? Improved business visibility? Partnerships can certainly strengthen a business’s reputation, so there’s always that.

3. Don’t focus on the money

Many nonprofits enter partnership conversations with a dollar amount in mind — but that’s not the first topic you should bring to the table. Instead, direct the conversation toward other benefits of partnering with a nonprofit.

Consider for a second that 66% of employees expect ongoing training to help them get better at their jobs. Maybe you could position a potential partnership as an opportunity for a business’s employees to develop new skills. That’s certainly a value-add for any organization.

Because most small to midsize businesses serve the same community as nonprofits, it’s also important to position how a partnership could strengthen both your efforts to benefit a specific demographic or cause. 

Let’s consider my local RE/MAX as an example: With the rise of COVID-19, it directed its philanthropic efforts to benefit first responders. Our organization could’ve easily just written a check, but we also discussed other opportunities to participate in that initiative — be it in marketing, social media, and so on.

Long story short, your partnership pitch should include more than a fundraising goal. At least during the initial conversations, hone in on community engagement, volunteerism, and other value-adds before you tackle the big ask.

4. Check-in regularly 

Securing a partnership is definitely something to celebrate, but your work is far from over. Just as much time and effort should be devoted to maintaining your relationships. To ensure a successful partnership, touch base regularly.

Share what a company’s funds or volunteerism are doing for the community. Highlight success stories, acknowledge its contributions and provide at least some proof of return on investment. Many businesses will even ask for documentation or proof of impact, as they want an idea of the partnership’s outcomes to quantify the return on investment.

Come prepared with data, such as how much exposure the business received during a campaign. This could be in the form of likes, shares, and reach on a social media post that the business-sponsored for a charity event.


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Using your business plan to secure partnerships

Establishing your first partnership can feel somewhat intimidating. You’re working with an established business, so the natural reaction is to look for more ways to prove your worth. If that’s really a concern, one simple way to do so is to come prepared with a business plan.

While the idea of business planning reads like a for-profit organizational term, having one for your nonprofit is absolutely vital for long-term success. It helps define your mission for potential partners, provides an outline of strategic and financial efforts, and displays a trackable understanding of how to effectively manage cash flow to accomplish organizational goals

Having all of these elements prepared and presentable can make partnering with your nonprofit an easy decision. And just remember that these partners share your goals and mission — they want to see your nonprofit succeed just as much as you do. Start with these tips, roll them into your business plan, and you’ll surely be on your way toward sparking long-lasting, mutually beneficial partnerships.

How to Estimate Realistic eCommerce Shipping and Fulfillment Costs

When starting your eCommerce, product-based business there are many budgetary factors you need to consider. 

Product manufacturing costs and marketing expenses are what most entrepreneurs plan first, as they comprise a significant portion of the overall startup budget. But one major cost that often surprises new business owners and can make or break your business is the cost of shipping and fulfillment.

When creating your business budget, an accurate calculation of shipping and fulfillment expenses is a must. Although experts estimate that these costs will comprise upwards of 15-20% of your total net sales, the only way to know how much your business truly needs to budget is to calculate these numbers for yourself.

While there is no quick and easy way to figure out these numbers, with a little bit of math and planning, it is possible. This article will help you estimate your eCommerce fulfillment and shipping costs using this simple blueprint:

Start with assumptions about your business

Before jumping into a complex analysis with both feet, it’s important to establish a few assumptions about your business. Doing so can help give you a starting point to work from and ensure you have some idea of what to expect. 

You’ll likely have unique aspects of your business to consider alongside what’s listed here, but this is where we recommend you start:

1. You are a new startup 

You’re either operating your own warehousing and fulfillment operations OR, you are using a fulfillment company to achieve this goal.

2. You are not utilizing drop shipping

Your cost structure will be significantly different if you’re utilizing drop shipping and can be determined in conjunction with your drop shipment provider.

3. Your product costs are not included in this estimate 

You will exclude product costs since they are considered direct costs of goods sold rather than fulfillment and shipping costs. Inbound freight costs to bring your product from supplier/manufacturer to your warehouse will also be included in the costs of goods sold and are discussed below.

4. Marketing costs are not included in this estimate

You will be allocating the cost of sales and marketing (e.g. commissions on sites like eBay or Amazon, SEO costs, PPC costs, etc.) as marketing costs rather than shipping and fulfillment costs

5. You’ve already created a sales forecast

Your unit sales forecasts are complete and can, therefore, be combined with shipping and fulfillment projections. If you haven’t done this yet, check out our exhaustive guide for forecasting sales, including unit sales forecasting.


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2-Steps to start your eCommerce fulfillment and shipping budget

Before you dive into the “meat and potatoes” of your budget, it’s helpful to plan for two non-recurring costs: inbound freight costs and initial investment costs. 

1. Inbound freight cost

First, you need to account for the cost of inbound freight from your supplier to the warehouse. It’s extremely important to note that these inbound freight costs are considered costs of goods sold because they are required to get your products in ready condition to sell. 

Of all costs included in this analysis, these are the only costs that will be rolled into costs of goods sold – the remaining costs will be included in sales, marketing, and administrative costs (otherwise known as operating costs). 

Shipping finished goods domestically to your warehouse can be done with a small parcel carrier like UPS or FedEx, a less-than-truckload (LTL) company, or a full truckload carrier (commonly referred to as TL carriers). For products produced overseas, a global shipper will be required. 

Global shipping often incurs extra costs beyond just delivery and may include customs fees and drayage fees to clear customs and bring your product to your location. Sites that can help you with this equation include freightquote.com, Uship.com, and Icontainers.com.

Once you know your inbound freight estimates, you can easily divide the total cost by the total number of units ordered and come up with your inbound shipping cost per unit. Once sales are made, you may include these numbers in your cost of sales.

Inbound shipping cost (per unit) = total freight cost / # of units ordered

2. Investment cost 

Second, you’ll need to come up with a projection of your initial investment costs, including the purchase of:

  • Shelving
  • Pallets
  • Bins
  • Labels
  • Scanners
  • Computers
  • Printers
  • Additional warehouse necessities

For a start-up running out of a garage or apartment, the initial investment may be as simple as a package scale and some shelving. More sophisticated operations may need a full list of warehouse equipment. However, these costs may not apply if you are outsourcing your warehousing. It’s one of many reasons why companies choose to outsource fulfillment and shipping.

Initial investment costs needed to launch your warehouse operations should not be confused with business start-up and organizational costs. That consists of money spent before the business launches to create or acquire a business (IRS definitions can be found here) and a certain portion of these costs can be expensed immediately. 

Rather, initial warehouse investment costs will be amortized using tax depreciation rules and will be visible in your budget as a monthly line-item expense for depreciation of equipment. If you’re unclear about whether a cost is expensed or amortized/depreciated, speak to your accountant or tax expert.

Calculating monthly costs of running your eCommerce fulfillment center

Once you have calculated any inbound freight costs (to allocate to your costs of goods sold calculation) and determined what initial equipment will need to be purchased (to be amortized/depreciated over the life of the asset), you should calculate your monthly shipping and fulfillment costs. 

The easiest way to determine this is to divide these costs into fixed and variable components. We will assume for this purpose that these costs are recurring and remain constant until your business grows.

Fixed costs of shipping and fulfillment

Fixed costs are business costs that do not fluctuate with volume changes in goods produced. The first factor to consider when determining your eCommerce fulfillment center fixed costs is the cost of labor. This includes the time it takes to receive product from suppliers/manufacturers, pick and pack merchandise, ship orders, provide customer service, and process product returns. 

The goal of your labor calculation should be to determine how much labor will be needed in total to run all of your warehouse operations – allowing you to determine overall salaries and benefits expenses. Keep in mind that your labor costs will likely change as you grow, but for now, treat it as a fixed cost.

Receiving 

Receiving requires a human employee to receive an order, count that order, quality check the merchandise, enter the items into an inventory tracking program, barcode or SKU the merchandise if needed, and then physically move the merchandise to a location within the warehouse. 

To estimate your receiving costs, you’ll need to both estimate how frequently you’ll be ordering merchandise from the manufacturer, and determine how long it will take to perform the receiving operations for each shipment. 

Picking and packing

Picking and packing require time for you and your staff to pull, pick, and pack orders. This is in addition to the time it takes to receive, handle customer service issues, and complete returns. A small enough startup may be able to rely on just the founder to perform these tasks, thereby saving money. However, we still recommend calculating these costs because they will eventually become a factor as your business grows.

Customer service  

Don’t discount the time needed to provide customer service. This time includes the time it takes to answer customer inquiries and provide a solution to those inquiries.

Management time 

Management time is the time it takes to run your business, including day to day warehouse operations and management and training of your staff. In the case of a bootstrapped startup, management time may not come into play right away but will be needed at some point as your business grows. 

Returns processing 

Nobody likes getting returns, but accounting for them and the time they take to process is a vital part of your budget. Returns processing not only includes the time it takes to process the returns back into inventory, but also the time it takes to inspect them for damage, repackage them, write off damages, and re-shelve them. 

This process usually takes more time than it does to pick and pack the original order since there are generally more steps involved. For eCommerce businesses, expect returns to be as high as 30% of sales

The total fixed monthly costs of labor can be determined by estimating the amount of labor needed to:

  • Receive product,
  • Pick and pack orders
  • Ship orders
  • Provide customer service
  • Manage employees 
  • Process any returns. 

Remember, labor costs don’t just mean employee salaries. To determine labor costs, factor in not just the labor costs themselves, but an additional 15-30% to cover taxes and benefits.

Warehousing 

Warehousing is a broad term that addresses the costs associated with operating the warehouse itself, including rent, utilities, insurance, and internet. For rent, a search for local warehousing space can help you determine an estimated monthly cost in your local market. 

For utilities, insurance, and the internet, simply calling these providers can give you an exact quote of what you can expect to pay for these vital services. If your business is going to be started out of your home, you won’t be paying monthly rent, but you can potentially expense a portion of your home office expenses. Most businesses create a separate expense line item for each component of fixed warehousing costs. 

Variable costs of shipping and fulfillment

Next, you’ll need to consider your potential variable costs. These are costs that increase and decrease depending upon production volume. 

Some of the more common variable expenses include the cost of SKU labels or other bar code labels applied to each product unit (the average cost of printing a SKU label is about $.05 per label), the cost of supplies such as shrinkwrap or other warehousing supplies that may not be required to ship to customers, and the cost of cartons, packaging, inserts, and embellishments. The average cost of a standard carton ranges from $.50 - $.99. Inserts and embellishments, including labels and packaging, can be estimated at sites like Uline.com.

The most significant variable cost of shipping and fulfillment, however, is the actual shipping costs to deliver your products to your end customers. Because shipping costs are extremely complex, we’ve included a more extensive breakdown of how to budget for this expense below.

Shipping costs to account for

The most difficult part of your budgeting calculation will be determining your shipping costs per unit for an average order. However, this is a crucial step in planning your budget. To determine your shipping costs, you must consider many dimensions: 

  • Product’s volume, size, type of packaging needed, girth and weight
  • Special factors such as refrigeration or hazmat requirements
  • Insurance
  • Residential calculations 

Understanding domestic and international shipping costs

To get an idea of what shipping may cost per unit, it is recommended to choose a few destination zip codes throughout the country or shipping zones and plug that information into an online freight quote tool and formulate an average cost per shipment. If your sales are made throughout the country, you can estimate the percentage of shipments to different areas of the country to create a weighted average estimate of shipping. 

For example, if your warehouse is in California, you can calculate the cost to ship product within the western US, to the central US and the eastern US. And then estimate the percentage of shipments in each of those areas. The blended average shipping cost can then be used as a “best guess” of your unit shipping costs for budgetary purposes. 

Other factors to consider for shipping include international shipping (if applicable) and rush shipping fees (express, 2-day, and overnight shipments). To enter these factors into your budgetary equation, determine your average shipping cost for each and create a blended average, or project the estimated percentage of total shipping on each service level, creating a specific average shipping fee per unit.

To determine these shipping costs, utilize the shipping calculator tools on sites such as UPS, FedEx, and DHL.

Important takeaway: By determining an average shipping cost per unit, you can use that number to create projections according to various unit sales levels.  

Don’t forget to add back shipping and handling charges to customers

Also, keep in mind how you will charge your customers for shipping. There are several ways this can be achieved, many of which can drive down your shipping costs if you are passing along at least some of the cost to your customers.

The first method is calculated shipping. Calculated shipping factors in the exact rate of shipping by using a rate table or a live rate to determine the actual cost at checkout. Another method is flat rate shipping, which determines the average cost of shipping and charging a flat rate based on the dollar value of the product. 

You may also offer free shipping at a certain dollar level and cover these costs yourself. Remember, whatever shipping rate methodology you choose, many customers are sensitive to high shipping and may abandon a sale if they feel the shipping is too high.

If you do decide to charge customers for shipping, add this money back to your budget, thereby reducing your overall operating costs.

Some costs will change over time 

The good news about variable costs is that they may go down over time, especially as your sales volume increases and your processes become more streamlined. You may also experience a drop in variable costs by investing in your own equipment, such as software and scanning technology. Furthermore, you can expect shipping carriers to give you better discounts as your shipping volumes increase. 

Outsourcing fulfillment and shipping

If you opt to outsource with a fulfillment service, your costs will be variable, with the exception of a few costs such as management time needed to oversee the outsourced fulfillment service. Initial investment costs will be at a minimum if outsourcing is pursued. 

Outsourcing brings another added benefit – you’ll be able to tap into their discounted shipping rates since they aggregate freight among many different customers. Using the shipping estimates from above you can adjust your costs down 10-20% for ground shipping and 20-30% for express shipping because you’ll get to use a fulfillment company’s rates, depending upon your overall monthly order volumes.

Furthermore, warehouse space costs become variable when using a fulfillment center – so you only pay for what you use that month. To determine an estimate for warehouse charges, you can estimate how many goods would fit on a pallet and figure out the average monthly number of pallets required. Alternatively, you can also formulate a projection for how cubic space you’ll occupy per month. This will help determine your total storage costs. 

You can use the below numbers from FulfillmentCompanies.net’s average fulfillment pricing and costs survey to determine your projected costs.

  • Set-up Fee (fixed one-time to set-up your account): $520
  • Account Management Fee Per Month (monthly fee to provide customer service and answer your questions):  $130 per month
  • Receiving Fee Per Unit: $1.50 per box or $.25 per item
  • Storage Fee Per Month: $14.58 per pallet per month of $.495 per cubic foot per month
  • Fulfillment Fee Per Order: $$2.96 per single unit order
  • Box Fees Per Order: $.25-$.99 per carton
  • Order Insert Fees Per Order: $.17 per insert
  • Outbound Shipping Fees Per Order: 10-15% discount off of published rates for ground shipping and 20-30% discount off of published rates for express shipping
  • Returns Fees: $3.55 per order for a single item order

Outsourced fulfillment and shipping fees can be categorized for budgetary use as follows: 

Unit costs 

  • Receiving
  • Fulfillment fees
  • Box fees
  • Order insert fees
  • Outbound shipping fees
  • Returns fees

Monthly recurring fees

  • Storage fees
  • Account management fees

Your set-up fees can be treated like initial investment costs.

Putting it all together

When you complete this analysis, you will have the following information at your disposal:

  • Inbound freight per unit to be added to your costs of goods sold.
  • One-time charges, including your initial investment in shipping and fulfillment operations, which you will depreciate over the life of the assets.
  • Monthly fixed costs, including rent and other overhead and labor costs, which you will expense monthly.
  • Unit variable costs, including inbound freight per unit and shipping, add-backs, which will be multiplied by total unit sales and expensed monthly according to your sales forecast.

As you can see this process is somewhat complicated and detail intensive, but it is a valuable exercise in determining your shipping and fulfillment costs. Doing so can help you estimate the overall cost of your eCommerce business and can truly spell the difference between failure and success

Fundamentals of Lean Planning: How to Plan Less and Grow Faster

Let’s face facts: Writing a traditional business plan is a hassle. 

  • A traditional business plan takes too long to write.
  • Most people won’t even read it from cover-to-cover.
  • It’s often outdated by the time you finish writing it.
  • It doesn’t lend itself to frequent and easy updating—and that’s the core of the problem.

Historically, entrepreneurs have taken months to craft detailed plans without even gathering feedback from potential customers. They’ve viewed business planning as a single hurdle to get their business up and running or a thick wad of paper to shove across a banker’s desk in order to get the funding they need.

These business plans end up as just a collection of guesses and assumptions, instead of a proven roadmap for growth. 

But planning is still critical, even if the business plan might be broken. Studies have shown that businesses that set goals and track their progress grow 30 percent faster than those who “just wing it.” Furthermore, even established businesses grow faster when they have a plan

So what if I told you there was a better way to do business planning? One that lets you adjust and refine your plan as you gather more information about your business and your customers.

A method known as Lean Planning.

Welcome to the Lean Planning method 

Lean Planning is a 4-step process that helps you discover a business model that works and manage your company successfully.

Here’s the Lean Planning process:

  1. Create a Lean Plan
  2. Test the plan
  3. Review your results
  4. Revise your plan

These 4-steps replace the traditionally lengthy business plan with a 20-minute planning process. This ensures that you are taking small steps, reviewing your results, and creating incremental improvements—all while reducing your risk of failure.

It’s also simpler and faster than writing a traditional business plan. And, possibly the greatest benefit is that this method can benefit both startups and established businesses. 

If you’re a startup

Lean Planning helps you quickly figure out if your idea is any good and what you need to change to build a viable business.

If you’re an established business

Lean Planning works even if you’re already up and running. It helps you continually refine and tweak your strategy while measuring your progress toward your goals. After all, planning is about making better management decisions, not about producing a thick document that sits in a drawer.

Read on to learn how to make the lean model work for you by creating your own Lean Business Plan.


Download free lean business plan template

Step 1: Create a Lean Plan

The Lean Planning methodology starts with a one page Lean Plan that you can create in 20 minutes.

That’s right—one page. Lean Planning is a simple methodology and your Lean Plan should be simple, too. You can download a Lean Plan template and fill it in as you follow the steps below.

If you choose to build your Lean Plan in LivePlan, our business planning tool, it’s called a “Pitch” there, but it’s the exact same thing.

What to include in your Lean Plan

  • Strategy: What you’re going to do
  • Tactics: How you’re going to do it
  • Business model: How you’re going to make money
  • Schedule: Who is doing what and when

Let’s dive into each section.

Your business strategy

Your business strategy is simply an overview of what you want to do and who your customers and competitors are. Start by identifying the problem you are solving for people and follow up by explaining your solution to this problem.

Your business strategy is how, why and who you will be creating your business for.

The problem you’re solving

Businesses exist to solve problems for customers. Their products and services fill a need or satiate a desire. If all you have is a solution that is in search of a problem, you’re going to have a hard time building a successful business. So, start with the other side of the equation and focus on how you can help your customers solve a problem.

Start small with just one or two sentences or a few bullet points to identify the problem you are solving. Do the same thing to describe your solution.

Your ideal customer

Now, quickly describe your target market. Who is your ideal customer? If you know how many potential customers are out there, great. If you’re in the early stages of fleshing out your business idea, don’t worry too much about detailed market research. Instead, focus on defining your ideal customer—who are they, and what are their key attributes?

Your competition

Finally, create a shortlist of your competition. How do your potential customers solve their problems today?

That’s it. A business strategy doesn’t have to be complicated with Lean Planning. It’s just a few bullets points that describe the essence of your business: what you’re doing and who you’re doing it for.

Tactics

The next section of your Lean Plan is a short outline of your business tactics. This is just an outline of how you’re going to make your strategy happen. You’ll be thinking about sales, marketing, the team you might need, and any partners or outside resources you’ll need to leverage.

Outline your business tactics including sales channels and marketing.

Your sales strategy

Start by thinking through your sales strategy. Are you selling online or building a physical store? Maybe both? Or, perhaps your product will be sold in stores owned by other companies.

Your marketing strategy

Next comes your marketing strategy. How are you going to reach your customers? How do they find out that you exist and that you solve their problem?

Your team

If you need to build a team to grow your business, who are the key people that you’ll need to hire? If you’re an existing business, who are the critical employees that run the company and execute your strategy?

Key partners and resources

Finally, think about other businesses that you might need to work with to make your strategy happen. Are their key suppliers or distributors that you’ll need to have relationships with?

Remember, this is a Lean Plan, so each of these sections should just be three to five bullet points each.

Who will be involved with your business including your team, partners and suppliers.

Schedule

Now it’s time to build a schedule for your Lean Plan. Lean Planning is all about getting things done, so including a schedule is one of the most important things to include in your Lean Plan.

Setup OKRs and results for your business to meet.

If you’re a startup

Your next step is to get out from behind your desk and go talk to your potential customers (I’ll go into more detail on this in a moment). Your goal will be to verify that you’ve defined a solid strategy. To that end, a startup’s schedule should include things like conducting customer interviews, sending out surveys, researching physical locations, interviewing potential suppliers, and so on.

If you’re an established business

Your schedule will probably be focused on specific business milestones that are related to executing your strategy and implementing your tactics.

It’s critical to have accountability here. Your schedule should have dates and people responsible for completing each task.

Finally, make sure to include a time to regularly review your Lean Plan. You’ll want to review and revise this plan frequently, so having a regular review point is critical. I recommend a monthly review cycle, but reviewing more frequently is fine, too.

Business model

Even if you have a problem that’s worth solving, a solid solution to the problem, and a target market that needs your solution, you don’t have a business unless the numbers work out. You need a business model that works. The last component of your Lean Plan is a basic forecast and budget to ensure that a great idea can actually lead to a great business.

Take into account your starting and ongoing expenses while forecasting potential revenue.

Yes, forecasting and budgeting do mean looking into the future, and no one knows the future (at least I don’t!). But, it doesn’t have to be as difficult as it sounds.

Putting together some basic, bottom-up sales forecasts and a basic budget for expenses will quickly tell you if you have a business model that works—one that can create a viable business that will pay the bills.

At this stage, it’s important not to paint an incredibly rosy picture of your financial prospects. Instead, the sales forecasts should be as realistic as possible. Assume that not nearly as many people as you think will show up in your store. Assume that your website won’t get mainstream press coverage.

With this “realistic” forecast, do you still have a viable business? Can you turn a profit? If you can only be successful with incredibly high volumes of customers, you may need to take a second look at your pricing, expenses, and other aspects of your business model. Or, make sure that you get the kind of funding that’s needed for large marketing and PR campaigns.

You can get started on your Lean Plan right away by downloading our free template. Your Lean Plan will fit on one page and you’ll be able to complete an initial draft in under an hour—that’s much faster than writing a traditional business plan.

Step 2: Test the plan

Now that you have your Lean Plan in hand, you’re ready to start putting the plan into action to see if your ideas will work.

Depending on your business stage, you’ll do this in different ways. If you’re a startup with an unproven idea or an existing business that’s considering a new strategic direction, your next step is to validate the ideas in your Lean Plan.

Your Lean Plan is just a set of assumptions about a business. Ask yourself:

  • Do the target customers actually have the problem that you think they have?
  • Does the solution you’re proposing actually solve their problem?
  • Do your target customers want to pay for your solution? How much?

Reducing risk is your goal in the early stages of starting a business

Starting a business is full of risks. There are just so many unknowns, and it’s incredibly risky to just build your business based on a set of assumptions about your target market, their problems, and how they’ll react to your solution.

Your Lean Plan is a really just a set of educated guesses that need to be answered and then revised on a continuous basis until most unknowns are removed. That’s how you reduce risk.

So, you need to take the very simple, but very challenging step of actually talking to your potential customers.

Look at your first version of your Lean Plan as a set of assumptions that need to be proven true or false and then go back and revise your assumptions as you go. Refining your plan so that it’s a collection of facts instead of guesses can be the difference between a successful business and a failure.

If your business is up and running, focus on implementation

For more mature businesses that already know a lot about their target customers, the goal of the plan is to help guide implementation. In this situation, use a Lean Plan to get everyone on the same page, set goals, and manage the business.

Step 3: Review your results

Both Silicon Valley startups and Main Street small businesses need to know how they are doing. Which means  Are they growing according to plan? Why or why not? If not, what changes need to be made? Should the plan change?

For new startups

If you’re just getting started and don’t have many (or any) metrics to track yet, you should be reviewing the results of your customer interviews and any other information that you’ve gathered that would change your strategy. Perhaps you’ll be refining your solution or even tweaking the definition of the problem you are solving. Perhaps you’ll refine your marketing and sales strategy.

For established businesses

Beyond tracking key financial metrics such as cash, sales, expenses, accounts receivable, and accounts payable, businesses must track the other key metrics that are critical to their success. These other key metrics might be website visits, foot traffic in the store, tables turned in a restaurant or any other core number that drives business success.

Reviewing your results regularly is key to better management and success. These metrics should be reviewed at least monthly in a regular plan review meeting with key business partners and employees. This is when you refine your plan and your pitch if necessary and track your ongoing action plan.

Step 4: Revise your plan

Lean Planning is a process, not just a document. It’s is all about continuous improvement. You’re quickly defining a strategy, experimenting to see if that strategy works, reviewing the results, and revising the plan before you start again.

Lean Planning is never finished. It’s simply a process for running your business better, more efficiently, and setting you and your team up for success.

What if you need a more detailed business plan?

There may be a time when you need a more detailed business plan. There’s nothing wrong with that. Some people might want to read it, you may need to submit a full plan for funding and you might even want to document your strategy in more detail. 

Your detailed business plan will be born from your Lean Plan. The ideas in your Lean Plan will transfer from bulleted lists to sentences and paragraphs. You’ll add more detail to your sales and marketing strategy, your pricing strategy, and perhaps your manufacturing plans and distribution strategy.

For a step-by-step guide to creating a detailed business plan, check out our guide.


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Lean Planning templates and tools

To support Lean Planning, we built LivePlan. It’s a planning tool that helps you build a one-page Lean Plan, collaborate with business partners, and build solid financial forecasts. When you’re up and running, you can easily track your progress against your goals just by connecting your accounting software to LivePlan. It’ll do all the hard work of crunching the numbers and give you the reports you need.

Of course, you can also do all of this on your own if you’d prefer. We have all the templates and tools you need to do it yourself—all for free. We also put together a list of our best Lean Planning resources all in one place.

How to Prepare for Startup “Postpartum”

You’ve been dreaming of this moment for years; the moment that the dream of owning your own business becomes a reality. Your business, after all, is your baby. It’s your passion and your purpose. 

But now the fantasy has become a reality, and the simple fact is, it’s not what you dreamt it would be. Especially now, as the COVID-19 pandemic is claiming millions of jobs and endangering small businesses from coast to coast.

You don’t have to be confronting a pandemic, however, to feel a sense of letdown and uncertainty after launching your startup. In fact, like many new “parents,” you are probably going to go through a period of depression, doubt, and anxiety once you’re faced with the day-to-day operation of a business you’ve been dreaming of for so long. 

It’s one thing to fantasize about owning your own business. It’s another to actually do it. As reality hits, you’re probably going to realize that, while you love your baby business, you may not always like it. 

This article provides tips and tricks for navigating those first bumpy months of business ownership including best practices for helping you keep your startup afloat and at the same time keeping your sanity intact.

Make yourself a priority

The first thing to do when you’re dealing with startup “postpartum” is to give yourself a break for Pete’s sake! 

Remember the long hours you’ve been putting in. Acknowledge and honor the blood, sweat, and tears you’ve already invested in creating your baby. Celebrate what you have already accomplished — you’ve turned nothing into something. You’ve taken a dream and made it real.

That means you deserve to make yourself a priority. You’ve earned a little self-care, both for what you’ve already done and for what you will continue to do. So make sure that you are taking time each day to get away from the business. Carve out a chunk of time that is just yours. Time to clear your mind, relax, and recharge. 

Be strategic

One of the hardest parts of the startup “postpartum” period is simply facing the uncertainty, the fear. After all, the statistics can be downright terrifying. Eight out of ten startups fail within the first 18 months. More than 65% of new businesses don’t survive to see their tenth birthday.

What that means is that your baby’s survival isn’t going to just depend on the service or product you’re offering. It’s not only about meeting market demand or about being the best at what you do. Sure, that’s essential, but it’s not all.

You also have to be strategic, know your industry, and be on top of industry or market changes. Always. No exceptions. No delays. 

Nurturing your business through its difficult early years means understanding your customers, your competitors, and the market. Your products and services may be the best around, but if there’s no demand, whether due to market changes or competitor dominance, your business, sadly, won’t be long for this world.


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Be flexible

Now that you’ve launched your business, you are probably already well aware that things don’t always go as planned, and that’s okay. After all, life would be pretty boring if there were no surprises.

Surprises can also be opportunities, especially if you’re keeping on top of the industry as we’ve already discussed. Being ready, willing, and able to adapt and improvise is what’s going to keep your business healthy, lean, and agile. 

At the same time, it’s important to be patient. Not every change will bear fruit right away, nor is every decision going to be the right one. The key here is learning when to sit back and see what will come of the choices you make today and when to step in and change course. Revisit and update your business plan for guidance and to ensure your initial goals and OKRs make sense.

With time, you’ll get far better at learning when to fish and when to cut bait. 

Control yourself

When you’re nursing your new business through its first months, it’s going to be tempting to put your business into spending overdrive. You’re probably dreaming of growing your startup into a full-fledged empire overnight. 

If you’re managing a boatload of cash, such as from a small business loan, it’s going to be hard to apply the brakes, but growing too much, too fast is one of the surest ways to guarantee your company’s failure. 

That’s why it’s critical during this time to be deliberate and strategic. Actively managing your cash flow and forecasting what it and your sales may potentially look like in the coming months is key. Doing so helps you gauge the health of your business and avoid unforeseen problems moving forward.

Part of managing your company’s financial health also means managing your inventory. It’s imperative that you have enough product on the shelf and supplies on hand to keep your business flowing and your customers happy. At the same time, however, you don’t want so much inventory that it becomes a drain on the business. Like the best things in life, it’s all about balance, and sound inventory management is the way to strike it.

The takeaway

No matter how much you love your work or how long you’ve been dreaming of owning your own business, starting a company isn’t easy. The first months after launch can feel like a letdown, as stark reality begins to dispel the fantasy.

You can make it through your startup’s postpartum period with both your mental health and your company’s financial health intact. What it takes, first, is learning to celebrate your achievements and practice a bit of self-care so that you can remain in the entrepreneur’s game for the long haul.

It also means being strategic, data-driven, and keeping on top of the industry as well as learning to expect--and adapt to--the unexpected. That includes knowing when to let your business ambitions fly and when to pull back the reins.

How to Plan a Business Expansion Using Your Business Plan

Businesses start when their founders see a need for a product or service that they can provide. Businesses expand for the same reasons. You may grow to tap new markets or increase sales in your current markets. 

A good business plan is critical to starting a successful business. Creating a plan for business expansions is no less essential. And using your business plan template to develop an expansion plan increases your odds of success and allows you to avoid bad investments.

While it’s called a business plan, it can be written and utilized to successfully enter a new market, launch a product, or weigh the potential of adding an employee.

Throughout my 25-year career, I’ve written business plans or have been a part of teams developing plans for business expansions. Here are some best practices you can implement, that I have learned first-hand.

How to use your business plan as a checklist

A business plan’s table of contents serves as a checklist of all the aspects to consider when expanding your business. It starts with a high-level strategy and continues all the way to market analysis, sales plans, operations planning, and financial modeling.

You don’t create a new mission or vision statement when planning for new investments. Instead, your plan shows how the new investment supports your existing values, mission, and vision. Quickly scratch out a business plan, even employing a lean planning model, for your expansion like it’s a new business. 

You then clearly outline the strategy for your expansion and develop the steps for executing that strategy. The following standard business plan sections are essential to your expansion plans.

  • Executive summary: This short summary quickly informs your employees, lenders, and investors about the nature and benefits of the expansion. It enhances communication and forces you to clarify the key aspects of the expansion.
  • Operations, marketing, and personnel plans: You’ll outline the details of what operational costs, marketing budget, and additional positions you’ll need for your expansion to be a success. This will also be the roadmap for your existing employees to execute that plan.
  • Financial projections: You’ll need to forecast how the expansion will improve future profitability. Initial versions may show you need to make changes to your plans to reach an acceptable return. Your projections will estimate the amount of capital you’ll need for the expansion.

Pausing to ensure profitability

Business owners and managers make optimistic assumptions about a project’s success when they are emotionally committed to an idea. They readily accept anecdotal evidence of success. The decision-making error of confirmation bias causes them to accept facts that support their beliefs while ignoring facts to the contrary.

Put simply, they get sloppy in their rush to “seize the opportunity.” As the saying goes, haste makes waste. The rush to claim perceived profits wastes cash.

Expanding to new regions and rolling out new product lines are complicated endeavors. Thinking through a business plan for these initiatives provides critical analysis of the feasibility of the plan. The plan then serves as the implementation roadmap for executing your expansion.

Methods for testing if your expansion makes financial sense

There are two ways to prevent you from executing on a plan that hasn’t been thoroughly thought through. 

The first is preparing a thorough plan to submit or pitch in order to get cash for the expansion. Lenders and equity investors are less emotionally involved in the plan as people within the company. They’ll easily tell you if they think it’s a well thought out endeavor by way of choosing to or not to fund you.

The second way is to appoint a “devil’s advocate” for the expansion plan. This is crucial when there is little discussion and little disagreement about a plan. As Patton said, “If everyone is thinking alike, then someone isn’t thinking.” Appoint at least one person to identify weaknesses or unanswered questions.


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A business plan for a new employee in a new market

Analyzing a new region or a new employee is very similar to starting a new business. You use the same business plan components you used when starting your business when planning for and making these other major business decisions.

For example, I was the Program Manager for a group of investment advisors at a financial institution that had banking branches in a rapidly growing region. One of my advisors in another region was simultaneously servicing their own region along with this one. I needed to determine whether we could profitably hire an additional advisor to properly manage this emerging marker to allow the current advisor more time to manage their own.

By walking through a business plan outline, it helped me research the market, identify the characteristics of a target candidate, and calculate the financial feasibility of placing an advisor in the market. To be honest, the plan showed we had limited opportunities. 

However, the plan identified the few options that would be successful in this market. Doing so helped us avoid mistakes that could have cost us substantial time and money.

Planning for new regions

The first investor you always need to convince with a business plan is yourself. This is even more true for plans for new locations and regions. You’re deciding whether to invest your company’s money and time into these new locations. Once again, the components of a startup business plan are useful for these expansions.

In this case, your planning and analyzing the allocation of resources and capital. Resources committed to the new location aren’t available for other opportunities. So if your company says “yes” to this expansion plan, it must say no to another. 

Business plans for new companies answer the question, “Should I start this company?” Plans for new locations answer the question, “Is this the best investment of my company’s resources?” You’re comparing the return on the new location to the return of your other options.

Mission, vision, and values

I was the CFO of a community health clinic system, and we were quickly growing with scarce resources. Our mission, as defined by the community partners that formed us, was to provide medical, dental, and mental health services.

We ran a transitional housing program that was weakly linked to our mission. The transitional housing, while an admirable initiative, was funneling resources away from our primary mission, so we decided to exit the program.

If we had done a business plan before we began transitional housing, we could have identified how it didn’t support our mission. A thorough plan could have shown us the time and financial commitment needed to run the program, as well as how to invest our scarce resources better.

Avoiding losses through planning

Not all plans are executed. That’s success, not failure.

The weaknesses of a plan usually surfaces during financial analysis or operations planning. That’s where I’ve repeatedly found problems that weren’t necessarily obvious at first. 

This typically occurred with new products. Financial analysis often showed how the new product or pricing caused profits of other products or existing products to drop. Operations planning would sometimes project production costs well above initial estimates. If interested, I explain this exact scenario in more detail in an article I did on pricing analysis

Saying no to a project after careful planning is a success, not a failure. You now know what not to do, which is valuable all the same. Avoiding mistakes prevents wasting time and money.

Integrating the project plan into your full business plan

After you’ve gone through the process of developing and scrutinizing every inch of your plan and found it to be viable, it’s time to execute. And that means integrating it into your master business plan. 

You’ll need to identify how the expansion plan will pull away resources from other parts of your business plan. Additionally, you’ll need to address the addition on your budget sheet and forecasts, as well as determine which projects have priority for these resources.

Expansions often decrease profits before increasing them and require large initial investments. The investment expenses precede the revenues they will ultimately produce and may lead to cash or profitability constraints. Phase in your plan slowly to dampen the impact on your cash flow and maintain profitability.

Remember your stakeholders’ interests

I worked at a financial institution that developed a plan for remodeling all existing branches and building new branches. We were committed to the concept but repeatedly pushed back parts of the plan to maintain a return on assets that was acceptable to our board of directors.

Marketing messages and the interests of your current audience will also need to be prioritized. Will marketing for the expansion dilute marketing of your brand or other products? Do you need to further segment out your established target market?

It can be very easy to promote too much or send the wrong message when launching an expansion. Determine how you’ll approach your marketing efforts to ensure that you don’t overwhelm or deter your customers.

From concept to execution

Planning doesn’t occur in a straight line from idea to execution. It’s much messier than that and requires difficult conversations and compromises. Not all ideas are good, but a planning process that identifies bad investments can lead to success, even if you decide not to expand.

Revisit and update your plan before deciding to marry expansions with existing operations. You can easily use the business planning process to evaluate opportunities and identify your best path forward. All that work will then pay off as you quickly execute a comprehensive and well-coordinated expansion plan.

Financing Your Business During COVID-19

Many small business financing options feel as though they have evaporated in the wake of the crisis caused by COVID-19. Many lenders tightened their credit requirements while others are stepping back altogether to wait out the storm and see what happens. 

As the Paycheck Protection Program winds down and is expected to stop offering forgivable loans to small businesses by the end of June, it will be more important than ever for small business owners to understand their options to meet their financial needs over the coming months.

Fortunately, there are lenders coming back online and others who are still making capital available to borrowers looking for cash to fuel growth, fund working capital needs and keep their doors open as they prepare for their customers to return.

2020 Will Be An Interesting Year For Small Business Financing

Business credit cards, which I have long considered a very good way for small businesses to establish or build business credit will likely start considering new borrowers through the second half of the year, but it will likely only be the most creditworthy. 

I also expect to see lines of credit difficult to come by until at least 2021. In the aftermath of the Financial Crisis of 2008, many lenders reduced their customers' credit lines or canceled them completely. With the exception of SBA-guaranteed loans, we should probably expect to see many lenders reluctant to offer term loans to small business owners digging their way out of the morass caused by stay-at-home orders that temporarily shuttered many small businesses for most of the second quarter of this year.

Although nothing would make me happier than to be wrong, I expect the same thing to happen now, at least for the next six months. As a general rule, there are three questions lenders need answers to, which will be difficult for many businesses to answer today:

1. Can you repay a loan? 

Does your business have the revenue and cash flow needed to successfully service debt? This will be difficult to forecast if your business has been shut for the last 12 weeks.

2. Will you repay a loan? 

Do you have a track record of making regular and timely periodic payments? Even if lenders evaluate your creditworthiness strictly on pre-COVID-19 credit performance, there are many small businesses that simply don’t have a very strong track record.

3. Does your business have the ability to make payments regardless of what happens in the future? 

This question is likely even harder to answer today, with volatile financial and employment markets we haven’t seen the likes of since the Great Depression. Cash strapped businesses, starved for revenue for the last 12 weeks are having a difficult time navigating their cash flow needs for the next 12 weeks. Let alone making an accurate forecast for the next 12 months and beyond.


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Get Your Financial House in Order

Admittedly, this is the last thing business owners want to hear right now. But those lenders and alternative players still in the market will be looking for borrowers most likely to have the best answers to the three questions mentioned above. 

To do that you’ll want to make sure your bookkeeping is up to date and accurate, you have a good handle on your cash flow, and you understand your credit position so you can spend your time looking for financing in the places you will be most likely to find success.

I’m convinced it is also a good time to revisit your business plan and make sure it reflects a reliable strategy for your business moving forward. 

Many lenders today do not require a formal plan when you apply for financing. But the exercise of creating a plan compels you to think strategically about how you might address scenarios that could happen within your business—opportunities as well as challenges.

I’d guess that very few business owners thought about how something like a global pandemic could impact their businesses. They might be thinking in those terms now and it should be reflected in their business plan.

Look for Financing Where It Can Be Found

To be candid, our current financial crisis will probably compel us to look at options that might not be our first choice if we could time travel back to this time last year. That being said, there are financing options that can be leveraged to help a small business keep the doors open. Possibly even gaining momentum in today’s business environment in the hands of a savvy small business owner.

Merchant cash advance (MCA), sometimes called a business cash advance, is one of those options. This alternative source of capital isn’t really a loan, but rather an advance based upon the credit card sales that flow through your business’ merchant account. 

This type of financing can be expensive, but MCA providers are actively working with small business owners now, it’s relatively easy to qualify for an advance, and funds can be deposited into your account relatively quickly—often within a day or two of approval.

What Makes an MCA Different from a Small Business Loan or Line of Credit?

For starters, MCA providers don’t evaluate creditworthiness the same way a traditional lender would. They are primarily concerned with the volume of credit card transactions flowing through your business and whether or not they will supply enough cash flow to service the periodic payments. If your business is a restaurant, merchant, or other business that accepts credit cards, you may qualify for an MCA.

The language of an MCA is also different from a loan. MCA costs are typically not expressed as an APR, but rather a factor rate. Think of a factor rate as a calculation, rather than an interest rate. For example, if you are quoted a factor rate of 1.5, that means for every dollar you borrow you will pay back $1.50. In other words, if your advance is $10,000 at a factor rate of 1.5, you will pay back $15,000 to the MCA provider. $10,000 x 1.5 = $15,000.

Holdback is another potentially unfamiliar term you need to understand when considering an MCA. Holdback refers to the percentage of your daily credit card transactions that are debited from your account every day. Most MCA providers require a daily debit, but there are some that are using a weekly payment. The holdback percentage is usually between 10% and 20% of your daily receipts and remains fixed until the advance is paid.

Borrowers often confuse the holdback with the factor rate you will pay for the advance, but they are not the same. In the above example of a $10,000 MCA, if your holdback percentage was 15% and $5,000 was deposited into your merchant account today, the holdback would be $750. 15% of $5,000 is $750. If you received $8,000 in your account tomorrow, the holdback amount would be $1,200. 15% of $8,000 is $1,200.

Your holdback will vary depending on the credit card receipts in your merchant account but will continue until the balance is paid in full.

Is an MCA a Good Financing Option for My Business?

Many small businesses successfully use MCAs every year, but you need to make sure you understand all the costs and the repayment terms. That will be particularly true over the coming months.

Additionally, not all MCA providers are created equal. Costs, fees, repayment terms, and even their customer service can vary, so it will make sense to work with someone who can help you navigate the options and help choose the provider best suited for you and your business situation.

If you don’t qualify for more traditional financing options like a term loan, line of credit, or business credit card, and don’t want to try an MCA, it could be a great time to work on your personal and business credit profile and work to get lender ready for such time as more options come online. Additionally, if you do decide to give an MCA a try, you can also graduate to a lower-cost option down the road as they become available.

The 11 Slides You Need to Have in Your Pitch Deck for 2020

If you’re raising money for your business, having an impressive pitch deck is a key component in your fundraising toolkit. A great pitch deck gets potential investors excited about your idea and engages them in a conversation about your business, hopefully leading to an investment.

In this article, I’m going to give you the formula for what you should include in your own pitch deck. 

I’m leveraging the knowledge I’ve gained from listening to hundreds—if not thousands—of elevator speeches and pitch presentations. I’ve seen all different kinds of pitch decks and presentation styles and found that there’s a simple formula that just works.

I’ve also built my own and presented to major Silicon Valley VC firms over the years and have learned a lot about what works and what doesn’t.

While every business is different, I’ve found that the following format works for most businesses and is most likely to generate interest from potential investors.

To get started, download our free pitch deck template, and read on for insight into the importance of each slide as you develop your own deck.


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Goals for your pitch deck

This may sound counterintuitive, but the goal of your pitch deck is not to raise money. What? I know that doesn’t sound right, but the real goal of your pitch deck is to get to the next meeting.

Remember, your pitch deck and pitch presentation are probably some of the first things that an investor will see to learn more about your company. And because investments rarely are made after just one meeting, your goal is to spark interest in your company. You want investors to ask for more after they hear your pitch and not just show you to the door.

So, while a solid pitch deck is critical to raising money, the key goal of the deck is to get to the next step—another meeting and a request for more information.

The 11 slides to include in your pitch deck

1. Vision and value proposition

This is a quick one-sentence overview of your business and the value that you provide to your customers. Keep it short and simple. A great way to think about this slide is to imagine it as a short tweet—describe your business in 140 characters or less in a way your parents would understand.

It’s common for tech companies to make their value proposition a comparison to another well-known company. For example, you see many pitches that start with things like:

“We’re the Uber for Pets”

“We’re the Netflix for Video Games”

This can work, but be careful to make sure your comparison makes sense and you’re not just using a high profile company like Uber to signify growth potential. Your business model has to truly be similar to the company you are referencing.

2. The problem

If you aren’t solving some problem in the world, you are going to have a long uphill climb with your business.

Use this slide to talk about the problem you are solving and who has the problem. You can talk about the current solutions in the market, but don’t spend too much time on the competitive landscape on this slide—you’ll have a chance to do that later on.

Ideally, try and tell a relatable story when you are defining the problem. The more you can make the problem as real as possible, the more your investors will understand your business and your goals.

3. Target market and opportunity

Use this slide to expand on who your ideal customer is and how many of them there are. What is the total market size and how do you position your company in the market? If you can find the data, investors will want to know how much people or businesses currently spend in the market to get a sense of the total market size. This is where you tell the story about the scope and scale of the problem you are solving.

If it makes sense for your business, you’ll want to divide your market into segments that you will address with different types of marketing and perhaps different types of product offerings.

Be careful with this slide, though. It’s tempting to try and define your market to be as large as possible. Instead, investors will want to see that you have a very specific and reachable market. The more specific you are, the more realistic your pitch will be.

4. The solution

Finally, you get to dive into describing your product or service. Describe how customers use your product and how it addresses the problems that you outlined on slide two.

You’ll be tempted to move this slide closer to the beginning of your pitch deck, but try and resist the temptation. This is classic storytelling where you build up the problem and describe how bad it is for lots of people. Now your product or service is coming to the rescue to help solve that problem.

Most entrepreneurs are very focused on their product when instead they need to be focused on their customers and the problems those customers face. Try and keep your pitch deck focused with this format and you’ll tell a better story.

If possible, use pictures and stories when you describe your solution. Showing is nearly always better than telling.

5. Revenue model or business model

Now that you’ve described your product or service, you need to talk about how it makes money. What do you charge and who pays the bills? For some businesses (content sites, for example), advertisers pay the bills instead of users, so it’s important to flesh out the details here.

You can also reference the competitive landscape here and discuss how your pricing fits into the larger market. Are you a premium, high-price offering, or a budget offering that undercuts existing solutions on the market?

6. Traction and validation/roadmap

If you already have sales or early adopters using your product, talk about that here. Investors want to see that you have proven some aspect of your business model as that reduces risk, so any proof you have that validates that your solution works to solve the problem you have identified is extremely powerful.

You can also use this slide to talk about your milestones. What major goals have you achieved so far and what are the major next steps you plan on taking? A product or company roadmap that outlines key milestones is helpful here.

7. Marketing and sales strategy

How are you planning on getting customers’ attention and what will your sales process look like? Use this slide to outline your marketing and sales plan. You’ll want to detail the key tactics that you intend to use to get your product in front of prospective customers.

Finding and winning customers can sometimes be the biggest challenge for a startup, so it’s important to show that you have a solid grasp of how you will reach your target market and what sales channels you plan on using.

If your marketing and sales process is different than your competitors, it’s important to highlight that here.

8. Team

Why are you and your team the right people to build and grow this company? What experience do you have that others don’t? Highlight the key team members, their successes at other companies, and the key expertise that they bring to the table.

Even if you don’t have a complete team yet, identify the key positions that you still need to fill and why those positions are critical to company growth.

9. Financials

Investors will expect to see your financials: sales forecast, income statement (also called profit and loss statement), and cash flow forecast for at least three years.

But, for your pitch deck, you shouldn’t have in-depth spreadsheets that will be difficult to read and consume in a presentation format. Limit yourself to charts that show sales, total customers, total expenses, and profits.

You should be prepared to discuss the underlying assumptions that you’ve made to arrive at your sales goals and what your key expense drivers are.

Remember to try and be realistic. Investors see “hockey stick” projections all the time and will mentally be cutting your projections in half. If you can explain your growth based on traction you already have or compared to a similar company in a related industry, that is extremely useful.

10. Competition

Every business has competition in one form or another. Even if you are opening up an entirely new market, your potential customers are using alternative solutions to solve their problems today.

Describe how you fit into the competitive landscape and how you’re different than the competitors and alternatives that are on the market today. What key advantages do you have over the competition or is there some “secret sauce” that you have and others don’t?

The key here is explaining how you are different than the other players on the market and why customers will choose you instead of one of the other players on the market.

11. Investment and use of funds

Finally, it’s time to actually ask for the money. That’s why you’re doing this pitch deck, right? I know—I said that this pitch deck isn’t about actually getting funded. That’s still true, but your potential investors do need to know how much money you are looking for.

More importantly, you need to be able to explain why you need the amount of money you are asking for and how you plan on using the money. Investors will want to know how their money is being used and how it is going to help you achieve the goals you are setting out for your business.

If you already have some investors on board, now is when you should be talking about those other investors and why they chose to invest.

Other slides you might include in your pitch deck

While you do want to keep your pitch deck short, sometimes you may need or want to include a few extra slides that help explain your business. You likely won’t utilize them when you present, but it can be a great resource for investors to review after the fact.

Here are a few additional slides that are often found in investor presentations.

Exit strategy

If you are raising money from investors, you’ll need to show them how you plan on giving them a return. You do this in the form of an “exit strategy” slide that outlines who your potential acquirers might be if you manage to grow your company and be successful. Having an IPO and going public is a viable option for some high-growth startups, while other businesses are more likely to be bought by larger players in your market.

Partnerships

Some businesses have key strategic partnerships that are critical to their success. This can often be in the form of intellectual property licensing from a university or a key distribution partner who will be taking your product to market. If your success relies on these types of partnerships, it’s important to showcase them.

Demo and screenshots

If you have a prototype of your product, screenshots of your online service, or any other “show and tell” opportunities, it’s great to include a placeholder slide in your deck where you will actually show your potential investors how your product works and what it does.

Other documentation

Keeping your pitch deck as short and succinct as possible is critical. Remember, your goal isn’t to provide investors with all the information they need to make an investment decision. Its primary purpose is to tell a story, build excitement, and help get that all-important request for additional information and a follow-up meeting.

In addition to your pitch deck, you should have more detailed, additional information that you can provide if requested. Preparing these additional documents can also help ensure that you don’t try and fill your presentation with too much overwhelming information.

Tips to make your pitch successful

Here are a few tips to make your presentation as successful as possible:

Keep your pitch simple 

All entrepreneurs spend countless hours “in the weeds” thinking about every last detail about their business. But, for an investor pitch, less information is better than too much. You want your slides to be simple, convey high-level ideas, and leave room for questions. Simple and straightforward presentations always do better than detailed presentations full of bullets.

Skip the bullets 

Speaking of bullets, skip them. Slides full of bullet points are boring and don’t help tell a story. Try and use large fonts and limit the number of words on each slide. Use images wherever possible to help tell your story and build an emotional attachment to your ideas.

Tell a story 

Don’t just talk about the facts. Instead, focus on grabbing interest and getting your audience excited. Your deck doesn’t need to be the complete guide to your business. It just needs to generate interest so you can move on to the next step. 

One of the best ways to do that is to tell stories about how your customers use your product, how they currently experience problems that need to be solved, and how your company will make the lives of your customers better. The more you can tell stories that investors can relate to, the more you’ll be able to build excitement for your company.

Keep your presentation short

Make sure you have plenty of time for questions, demos, and discussion about your business idea. If you have a one-hour meeting, aim for your presentation to take 20 to 30 minutes.

Don’t overstate the market opportunity

Instead of top-down forecasts where you “only need to get one percent of a huge market” to be successful, focus on bottom-up forecasts where you detail your expectations for how you’re going to acquire customers. 

If you already have data on how an early version of your product is selling, use those numbers to help drive the rest of your forecast.

Ask for the money 

Yes, it’s a slide in the presentation deck above, but entrepreneurs sometimes forget to ask for the money. When you ask, it’s very important to be able to intelligently discuss how the money will be used. Your detailed financial forecasts should also take an influx of cash into account.

Keep your deck current 

Fundraising takes time. You’ll likely pitch your company many, many times before you get an investment. As legend has it, Pandora pitched more than 300 VC firms before getting investment. 

Assuming you’re working to build your company while you pitch to raise money, make sure that you keep your deck up-to-date with your latest progress, roadmaps, and so on. There’s nothing worse than presenting an out-of-date deck to potential investors.

Send your deck as a PDF 

You’ll almost always be asked to either send your slides ahead of time to investors or to leave a copy behind. If this happens, don’t send Powerpoint or Keynote files. Instead, send a PDF. This means that anyone who looks at the deck will see it as you intended with your chosen fonts and styles.

Make sure your deck stands alone without your presentation 

Your pitch deck will always be better when you present it, but it should ideally be able to tell some of your story without you being there to tell it. Investors might want to flip through the deck again after you’re done with your presentation and it needs to have enough content that the deck can stand alone and communicate some of your core ideas.

Documents you should have ready after you pitch to investors

Developing your pitch deck is only the start of your business planning journey. You’ll want to follow-up on a successful investor pitch with the necessary planning documentation to support your presentation. The following are just a few documents that you should have prepared to send after you pitch.

Executive summary

An executive summary sometimes called a summary memo, is a two-to-three-page overview of your business. It’s a document that investors can share with their partners and others in their firm to provide an overview of your business. Your executive summary should cover what’s in your pitch deck but in written form.

Technical documentation 

If you are starting a tech company or medical company, you may be asked to provide some additional detail on your technology. Investors in these types of companies will often want to vet your technical claims with an expert, so providing more detailed documentation, diagrams, workflows, and so on might be important.

Detailed financial models 

Any investor that’s seriously interested in your business will want to see detailed financial forecasts for at least the next three years so they can get an understanding of the underlying assumptions that are driving your forecasts. 

Investors will want to see your plans for hiring and employee-related expenses, R&D expenses, manufacturing costs, marketing expenses, and so on. Be prepared to provide a detailed sales forecast, profit and loss forecast, and cash flow forecast. A balance sheet is also often required. Whenever possible, visually represent your data with graphics. It’s proven to be more effective.

Detailed market research 

You may be asked to provide more details on your target market and the market research you’ve done to date. This isn’t always the case, but if you have the information it’s a good idea to be ready to present it in some format. Again, this data shouldn’t be part of your initial pitch deck, but instead should be ready if it’s asked for.


Make your pitch stand out with SBA-approved business plans. All the info investors and lenders need to evaluate your business. Get LivePlan.

Start developing your pitch deck

Ready to get started? Download our free pitch deck presentation templates and start working on your pitch in either PowerPoint or Keynote.

You can also find plenty of additional advice in our Elevator Pitch Guide. You’ll learn how to deliver an impactful elevator speech and find all the resources you need to perfect your pitch.

Hear more pitching tips with Peter and Jonathan on the tenth episode of The Bcast, Bplans official podcast:



Click here to subscribe to The Bcast on iTunes »

How to Create an Effective Coming Soon Website for Your Business

Think back to the last time that you literally sat on the edge of your seat with anticipation. Maybe it was in the last 5 minutes of an incredibly close sports championship. Or when seeing your favorite band live in concert for the first or seventh time. 

An effective coming soon page for a website should elicit a similar response from your visitors. 

It’s an opportunity to make a strong initial impression and generate excitement for your business. A professionally crafted coming soon website can also help you to attract investors, secure more funding, and establish your online presence before the full site goes live. 

Read on for a full guide to what you’ll need to build a successful coming soon website.

Why invest in a coming soon website? 

There are many reasons why you should utilize a coming soon landing page for your upcoming business. From creating a buzz to securing more funding, let’s take the benefits one by one.

Establish credibility 

A website helps to establish credibility. And a temporary site establishes your online presence before your full site or business is ready to launch. If you’re starting out, even just a coming soon landing page will help to demonstrate your presence to potential clients and investors. 

It also gives you a reason to put your site’s address on your business cards and a place to direct new contacts. On a technical level, you’ll also jumpstart the indexing process and be picked up by search engines without delay. 

Obtain funding

A temporary site can help to attract investors and interest in your business early on. On a visual level, you can showcase your brand, launch timeline, and how you’ll approach your target market. From a validation standpoint, you can take site visits, actions on-page, and a number of other factors to display interest to investors. 

You could even set up pre-sales through a coming soon landing page to raise funding. If your potential customers see the value and are willing to pay ahead of time, you could easily gain additional startup funds in exchange for a pre-order bonus or exclusive trial period. And as an added bonus, this simply validates your business for potential investors even further.

Build an email list

Lastly, you can easily kickstart your marketing efforts by building an email list. Just add an email sign-up form for web visitors who are interested in learning more about your business. 

You can simply start by sending launch and product updates, behind-the-scenes photos and videos, and even just informational content to get your customers excited.

Then leading up to launch, you can ramp up the consistency of your email marketing. Encourage your early adopters to spread the news, get excited about launch events, and even share exclusive promotions for signing up early. 

Design & content tips for a coming soon page

Your temporary site doesn’t need much—it can be a one-page site with basic company information and contact details. In general, a coming soon website typically includes these elements.

A great representation of a simple but effective coming soon website.

Captivating hero image 

The hero image is the place where first impressions are made. Make the most of it, and invest in a high-quality image or short background video. If you choose a background video, be careful not to use one that is really distracting, or counter to your business’ purpose or ethos. 

Also, be sure that the image or video isn’t housed within a massive file size. It may just be a one-page lander, but if it fails to load within a few seconds, you’ll see more and more people leaving without engaging with your site. Utilize an image compression tool and test your page speed from time to time to ensure you’re site is optimized for visitors.

Company logo

Like the hero image, you want a distinct identifier for your business, which is why it’s vital to include a logo. Don’t worry if it’s just a placeholder for the time being, anything that allows customers to connect with your business is useful. You can always update it with an official version once you’re closer to launching your full site.

Web-based value proposition 

Different from your mission statement, your web-based value proposition quickly states who you are, what you do, and what differentiates you from any competition. The value proposition is typically placed over the hero image and it should be 1-2 phrases since web visitors need to be able to scan and read the content quickly. 

It can be a simplified variation of your mission statement and even a catchy tagline if you have one prepared. If you find users leaving your site without taking action, it may be worth testing new variations of this statement to see if it resonates more.

Contact information and social media handles

Web visitors will most likely be asking themselves—How can I contact this business? Is this business in operation? 

Include a phone number, email address, and physical address (if you will be operating a physical storefront). For some customers, they may feel more comfortable following or chatting with you through social media. If you’ve built out Facebook, Instagram, or Twitter profiles, include links to them here so that they can easily connect and follow your business.

Basic information on products/services and launch timeline

At the start, you can just include a simple one-line statement about what your product or service will be. But as you nail down product specs, service models, and a launch timeline, you’ll want to add them to this page. 

The more context you can provide users and the more industry-specific keywords you can plant on your page, the more likely that people will find and sign-up for more information.

Email subscription form

Speaking of signing up, you’ll want to include some sort of subscription form on your page. Even if you only plan on sending product updates or general marketing emails, this is vital for building an initial audience. And as we said before, it’s also a simple way to validate your business idea and can help you get more investment interest.


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Selecting a website platform

There are numerous website platforms available to host your coming soon site. It’s up to you to figure out which option makes the most sense for you.

In general, you’ll need to consider the ease of use, customization options, and scalability of the website platform. The following are the most common options you’ll find yourself considering.

WordPress CMS

A lot of businesses use WordPress, the most popular content management system in the world, starting with a WordPress theme or template. The platform is very flexible and customizable, so the website can grow and expand with your business.

While you don’t need to build your full website on the same platform as the coming soon page, it might simplify things to invest in a versatile builder like WordPress for both projects.   

DIY platforms

If messing with web design really isn’t your thing, a DIY platform like SquareSpace or Wix may be a better option. This is an inexpensive and quick way to build your own site, that doesn’t require any web design knowledge to implement.

Be careful though, if you don’t have a strong eye for design elements, your coming soon site may end up looking generic or complicated.

Working with a web agency

Lastly, if you’d rather focus on other elements of your business and leave the website up to professional, you may want to consider hiring a design agency. One major benefit is that most web designers and agencies will include a temporary coming soon page as part of a larger website design project. 

And don’t worry, you’ll still be able to give guidance as to what you’d like on the site, you just don’t have to worry about actually designing it yourself.

Common mistakes to avoid with your coming soon website

As you can see, there is so much to be gained from a strong coming soon page. But it can also become a detriment to your new business if implemented incorrectly. Here are three common mistakes you should avoid when setting up your site. 

1. Settling for a default design template 

Your website may be the first impression of your business for most customers and investors. A low-quality template website does not convey professionalism in the way that a well-designed site would. 

If it’s your only option, it might be better to forgo the temporary site rather than give the wrong impression with a default design & messaging for your business. Instead, while you are balancing investments at the start of the business, make sure to allocate funds for a quality website design when you’re ready.

2. Lack of information and contact options

When landing on the temporary page, your visitors will likely be wondering if you’re open for business yet. If your company is not yet fully operational, make sure to provide up-to-date information and an anticipated launch date on the website page. 

If there’s no relevant information for the web visitor, there is no reason for them to stay on the website—or return to it. 

Depending on your business launch, your temporary website may be up for a few weeks or months. Make sure the site always has the most up-to-date information on your business as things change. Additionally, if you have built an email list, be sure to convey that same information to your subscribers or direct them back to the site for the latest updates.

3. Using a temporary website for too long 

Even if most of your business will come from referrals, it’s very common for potential clients to search for a business online before reaching out. While a temporary site can help you in the short-term, some businesses make the mistake of relying on one at length. 

As your business grows, the temporary website page can create the wrong impression and lead potential clients to think that you are still not open for business. Design trends also change quickly, and you’ll typically need to redesign a website every 3-5 years to stay up-to-date. 

Additionally, a 1-page website is not the best practice for search engine optimization (SEO). Search engines favor websites that have more information and content that will keep visitors on the website longer. And even if you did get ahead in the indexing process by having a temporary site, all that momentum can be lost if it’s never updated.

Leverage your coming soon website for long-term success

Establishing an online presence, even with a simple website, legitimizes your business in the eyes of potential clients and investors. 

Just be sure you utilize it as a springboard for your business, building a customer base, validating your idea and expanding it into a full-fledged company website. With the right approach and implementation, you can propel your business from a simple teaser page into a successful company.