Insights

Pitch Decks Versus Business Plans – What You Need To Know (And Why) EHE Director Elliot Smith and Chief Financial Officer Ross Faith explain all

Wednesday 19 January 2022

You’ve got a great business idea and you’re convinced you can make it profitable if only you had the finance to back you up. However, when it comes to securing investment, many entrepreneurs just don’t know where to start.

What documents do you need to have ready? How much information do investors want to see? Is it enough to have an idea fuelled only by passion? Do you need to provide a business plan with intricate detail? You heard something about a pitch deck, what is it?

To help the EHE Capital community (EHE stands for Entrepreneurs Helping Entrepreneurs), we’ve brought together EHE Director Elliot Smith and Chief Financial Officer Ross Faith to mop up some of the issues that frequently cause confusion and prevent you from forging a clear path forwards.

What is a business plan?

 

A business plan is a long-term living document that is best created collectively by all your senior team members so it displays accountability and expertise for each specialist area (for example, marketing or finance).

 

A good business plan needs to continuously evolve and adapt to internal and external factors. It will show that you’ve done your research, and it sets out your business objectives and how you intend to achieve them. 

 

A business plan is more in depth than a pitch deck; think of a pitch deck as the shop window that entices people into the shop, while the business plan is the shop. There will be some duplication between the pitch deck and the business plan – in the same way as you can buy items in the shop that you saw in the shop window.

 

A good business plan will…

 

  • Grab attention by bringing your business idea to life in a direct and to-the-point way.
  • List goals and strategies.
  • Include details of your target market and business scalability.
  • Cover details of the businesses that are considered competitors and what’s unique about your business (how will it survive in that market?).
  • Provide detail of strengths, weaknesses, opportunities and threats (SWOT analysis).
  • Clearly set out how much funding you need and how you intend to utilise it.
  • Share your proposed business structure (including team members or which positions you intend to recruit for).
  • Include a financial analysis.
  • Use visuals such as bullet points, tables, diagrams, images and graphics.
  • Most likely be created as a Word document and shared as a PDF (so details cannot be changed by the recipient).
  • Be long enough to clearly share your business story and message (it will potentially range from 10 pages to more than 100, depending on the funding request).
  • Include an appendix if necessary (so investors who are gripped by the rest of your business plan can explore the fine detail).
  • Offer a contingency plan.

 

Common mistakes in business plans (and how to avoid them)

 

  • Being overly ambitious.
  • No contingency plan if things don’t work out as quickly as intended.
  • Submitting lengthy documents full of narrative and waffle that are big enough to be doorstops!
  • Ill-thought-out plans that are copied from a template or another business!

 

Ross: “Some entrepreneurs make it sound like they are going to take over the world, and let’s be honest, we can read between the lines very quickly and so can the investor. Be realistic.

 

I’ve had a few business plans sent through with another company’s name at the top, which is very embarrassing because we’ve had to go back and ask, ‘Which business do you want me to invest in?’ There are lots of good templates available online but you need to make them your own. You need to know the key drivers for your business and adapt them to reflect what’s important to you as an entrepreneur. Put effort in.”

 

What does a pitch deck contain?

 

A pitch deck (the shop window) is a brief flavour of you and your business plan (the shop), which is mainly used to attract and secure investment. A pitch deck is the baby of the business plan and needs to serve as a snapshot of your business idea, tell the story of the problem you’ve identified and how your business will solve that problem. It’s a concise version (similar to an exec summary) of the business plan.

 

When do I use a pitch deck?

 

  • An ideal pitch deck is between 8 and 15 pages long; use it to attract attention and give a flavour of the business (the rest is then covered in depth by your business plan if investors are interested).
  • A pitch deck has a short shelf life; once you’ve secured funding, it has served its purpose (unlike a business plan which is a living document that will continue to evolve).
  • At the pitch deck stage, you are succinctly selling the concept of backing you and your idea.

 

Refer to our previous blogs for more information on How To Make Your Pitch Deck Stand Out For The Right Reasons and Your Top 12 Questions On Pitch Decks Answered.

 

What if I forget to include important details in my pitch deck or business plan?

 

Elliot: “I would ask for the outstanding information if there was enough interest and there was a clear opportunity for the products or services that someone wanted to offer. If an entrepreneur asks for half a million pounds but there is no marketing section [within the business plan], I would ask how much they planned to spend to get that interest from those customers.”

 

The EHE Capital community is focused on helping you build a strong mindset, secure funding, access peer support, and tap into the wealth of experience and expertise that we have to offer. Come and join the conversation with founders Guy Remond and Gary Fletcher.



P.S. If you would like to hear the full conversation between Ross Faith and Elliot Smith, check out our podcast Extraordinary Entrepreneurs Together.

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