Your main aim is to ease the concerns the investor may have about the risk they’re taking by investing in your business.
They need to be convinced that your business is viable and sustainable and a great way for you to do that is when talking about your business and the marketplace.
Like in all aspects of your pitch preparation, you need to do serious groundwork and none more so than researching the relationship your business has with the marketplace.
In this article I will give you key points you need to consider when developing your marketplace section of your pitch.
What gap in the market does your business fill?
This may well be the very first question an investor asks of you. And you need to have a good answer.
You need to be informed and succinct in explaining where in the marketplace your business sits. Now, this should be relatively simple for you because when you first started your business, you will have done so because you spotted a gap in the market.
Your business should solve a problem, and that’s the gap in the market. There’s two problems you can solve. An existing problem or a problem you have created and both are perfectly valid reasons to start a business.
Are you solving an existing problem?
For an existing problem the trick is to make the problem seem as big as possible. You need to convince the investor that not only is this a problem that needs solving but also because of that, it will mean there is a large customer base that will pay for the solution.
Prove that your business can gain traction in the marketplace because of how big a problem it is you’re solving.
Or have you created a problem to solve?
Solving a problem that you’ve created, which is by no means a mischievous act, simply means that you’re presenting a problem that your customers didn’t even realise that they needed solving.
Again, your job is to convince the investors that a) you can convince your customers of this new problem and b) because of this you can grow within the marketplace.
You may be solving a problem that other companies are already attempting to solve.
This is not an issue but it does mean that you will have to prove to the investors what makes your business better than the others. And not only that but how will you prove it to the customers and take up a large share of that particular marketplace.
Give your investors exactly what they are looking for
The investors will be looking for your detailed knowledge of your competitors and exactly how you plan to better them.
If your business is already trading, you need to know precisely where in the marketplace you are already operating and how do you plan to gain a larger share.
This comes back to the easing of investors’ concerns. You need to show them your actionable strategic plan that highlights the path your business will take to grow within the marketplace.
This strategic plan should also answer another question the investors are likely to ask. What other markets are you looking to enter?
You can, in your pitch, show the investors your plan to gradually dominate your marketplace and, to show you have serious business ambitions, go on to explain your vision for future markets.
Perhaps, after a year or so your plan is to enter into international markets which will heavily expand your customer base and accelerate your business growth. Whatever your business’ mission is you need to have a detailed map or the direction you want to go in.
Align your investor pitch with your strategic plan
It’s no use to just say where you want to go, you need to be able to show how exactly you plan to do it.
You need to know the marketplace as well as you know your product/service, marketing campaign, customers – essentially as well as anything else within your business.
It shows clearly to an investor that not only do you recognise where your business is but also where it plans to go, and more importantly how to get there.
Knowing the marketplace will inform you about your competitors and make it easier to develop an actionable strategic plan to perform better than them.
Don’t give a reason for an investor to doubt your business. Do your research and know your marketplace.
