How to Perfect Your Pitch
Here’s the quickest way to get investors to write the check.
Pitching investors is key to creating a successful food business — even for small companies just starting out — and the way you pitch will not only help you land investors, but will help your food business become a profitable one.
Success is about pitching a concept that sets you apart from the rest, and there’s a lot that goes into taking that initial idea to become a lasting brand.
Here's how to perfect your pitch.
Understand that many of the people who are looking at your plan may be doing so online — you may never get the opportunity to “pitch them” in person. So, what is it that’s in your plan that’s going to get them interested? You need to make it personal. What is it about your concept you’re so passionate about? Why should an investor be passionate about it? What’s the “USP,” or Unique Selling Point? Is it “UDD,” or Unique, Desirable and Deliverable? It may not be unique but it has to be desirable and deliverable! Three out of three is even better.
This is not a time to brag — be conservative but show five years of growth. (It’s better to over-deliver.) If your first year performs way under budget, you’ll have investors watching and questioning your every move from then on out. Keep in mind that usually the projections have to show an investor return on investment (ROI) of three to five years. That will typically require a 10-15% net profit (on revenue). If you do better, great!
Use of Proceeds
Show how you will be spending their money — every dollar of it. Whatever it costs to get the doors open plus some rainy day money (working capital/contingency) should be documented. In order to get the necessary ROI to satisfy investors, plan to spend 50% or less of one year’s projected revenue on all of the above.
Get Them in the Mood
Get them to picture how it would feel to spend time in the space. Use mood boards, renderings (if possible) and some menu pictures and descriptions. The closer you can get to an investor being able to picture themselves in the space, the better.
If you’re a new entrepreneur, say so. (You can’t hide it anyway.) Do a proper SWOT analysis (Strength, Weakness, Opportunity, Threat) in your business plan. It’s smart to show any flaws in your plan — it shows you know what you need to work on and that you have considered how to mitigate risk. Add that you’ve worked with a consultant or experienced partner to show you’ve acquired the necessary expertise.
Are you going to stick?
What happens when, in the first quarter, the venture is doing terribly, way below projections? Are you going to leave the project? What’s holding you there? What assurances can you give investors that you’re there for the long haul? Think about their concerns and assure them otherwise (and mean it).
Skin in the game
Have you put anything financial into the venture. Most new (and established) entrepreneurs would prefer to put in “sweat equity” i.e., no financial contribution. Even a relatively small sum ($25,000) shows you're “in the game.” It shows you believe in what you’re about to do. It also helps show you’re willing to stick around if things get tough.
They’re writing a check to YOU
Understand no one writes a check to a business plan. It’s one of the most personal things anyone can do. By writing that check, they’re saying “I believe in you.” No one writes a business plan that says “we’re not going to make money.” They will all show profitability (at some point), with a reasonable ROI. So, that’s not why anyone’s writing a check — they’re writing a check to you!
Create your own business plan with Rick Camac in Restaurant & Culinary Management at ICE.
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