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5 Mistake Entrepreneurs Make When Pitching Their Idea to Investors

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The first thing investors see is the entrepreneur and not the business plan or idea. Investors first watch out on how the entrepreneur presents or packages himself or herself before pitches his or her idea. Here is where most entrepreneurs fail due to mistakes they could have avoided if they knew about them. This article examines 5 mistake entrepreneurs make when pitching their idea to investors. It is aimed at preparing you for your next business idea pitch so that potential investors can invest in it and help you reach your desired destination.

5 Mistake Entrepreneurs Make When Pitching Their Idea to Investors

5 Mistake Entrepreneurs Make When Pitching Their Idea to Investors

The 5 Most Common Mistake Entrepreneurs Make When Pitching Their Idea to Investors

  1. Having no data for backup

Entrepreneurs make the mistake of not having market data to back up their assumptions. What most investors are looking for is a business that can scale up and become profitable with time. As a Nigerian entrepreneur, you should know your data so as to avoid this mistake. Make sure you relate with your investors on why you think the business will be successful in the long run.

If I am an investor, I would want to know the actual percentage of the market you plan to win with time.

  1. Not knowing your investors

Entrepreneurs most times are too excited pitching their idea to investors and not doing some research on the investors first. They don’t do their homework to check how these investors will be a good fit for their business startup.

Entrepreneurs need to ask themselves questions such as;

  • What sector of business do these investors primarily invest in?
  • What is their background?
  • Have they made an investment in your sector before?
  • How much money do they usually invest?

Knowing your investors beforehand, can relief you some sort of unnecessary stress and time in trying to pitch and convince them.

  1. Not preparing a detailed executive summary

Investors in Nigeria don’t have time to start going through some 50-100 pages of your business plan just to learn about your business. 2-3 page summary and maybe a PowerPoint presentation will serve. Try as much as possible to summarize your business plan for easy read for investors.

  1. Non-clarity on exact timeframe for generating returns on investors funds.

You don’t just pitch your business idea to investors expecting them to just pull out large sum of money for the business. It doesn’t work that way. Investors want to know how much they will be investing, how long it will take to start getting back their invested money.

  1. Not doing a demo

A prototype or a working demo of your product or service will give the investor a better sense of what you’re trying to pass across plainly.

Concluding remarks

You should make sure you prepare yourself and not only your idea because investors invest first in you before looking at your business plan. I hope this article on 5 mistake entrepreneurs make when pitching their idea to investors was helpful to you. Let me know your thoughts in the comment section below.

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Ekemini Ekpo is a professional writer, blogger, and internet marketer. He is passionate about engineering, business, investment, entrepreneurship, finance, and personal development. When he is not managing web projects, he handles academic research writing and data analysis for individuals and organizations.

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Advice

How to Pitch Your Idea to Investors in Nigeria

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Are you an entrepreneur in Nigeria with a business idea that you want to pitch to investors? But you don’t have the finance to invest in the business and the only option left is to look for investors in Nigeria who would love to invest? Read this simplified guide to learn how to pitch your idea to investors in Nigeria in a professional way.

You see, Nigeria is a country with many people with money that don’t know what to do with it. A large chunk of these people will be very happy to invest their money in places that will bring them maximum profits or a good return on their investment. Having the opportunity to meet this class of people (i.e., angel investors) to share your business idea with is one problem.

Here’s what you should know…

You see, it is one thing to have a good business idea, but a completely different thing to know how to pitch it to potential investors. You need the skills of how to convince potential investors within minutes to invest in you, because if you don’t know how to do it professionally, investors won’t be able to understand what you’re trying to relate with them or how best to help you.

The importance of rehearsing your pitch is one thing I can’t stress enough in pitching potential investors in Nigeria. As an entrepreneur, you might think that you know your business in and out, and that when it comes to pitching it to investors, it will be easy just like singing the National anthem (is that even easy?). Well, this is not always the case most times. Cases abound where entrepreneurs freeze in front of investors while pitching, and ramble on and on. Many entrepreneurs don’t put the same effort they used in preparing their business plan to pitching their plan to investors. As such, you should take the time to acquire the needed skills of business idea pitching to pitch your business idea to investors in Nigeria with ease.

How to Pitch Your Idea to Investors in Nigeria

How to Pitch Your Idea to Investors in Nigeria

How to Pitch your Idea to Investors in Nigeria.

1. Start with a story, end with your solution

If you can relate your story to the problem you are solving in the market place, then do it. Nothing engages people better than a good captivating story. Start your pitch with a story that will catch your audience or investor’s attention, the complaint and address it to how your business idea will be the solution to the problem in your story.

So, don’t just keep talking about the problems all day, pitch your idea by showing potential investors how your product or service will solve the hungry market’s problem. Make it easy for the investor to understand how you plan to execute the solution with your idea.

2. Niche down to the exact market you are targeting.

Every product, service or business idea has a specific market it is made for. Don’t lie to investors saying that your product or services is for everybody on earth. It is too broad. Everybody is no market. Tell your investors the market needs your idea is meeting.

3. Analyze Your competitors

A quick analyses of your potential competitors is very important as every business has a competitor even if the competitor is located far away in another continent. Tell the investors how different your business model or approach to solving the problem is from that of your competitors and how much market share you are likely to take if your idea comes to the limelight through their support.

4. State the exact amount you need

Don’t beat around the bush about the exact amount of money you need to fund this idea. Tell investors the exact amount of money that will be required to fund the business idea to success, as well as how much have been invested (if any). Also, give a detailed breakdown of why you need the exact amount you have stated and the intended outcome of the money too. You can do this using slides, charts, tables, diagrams, etc.

These are few tips to know on how you can pitch a business idea to investors in Nigeria. I hope with this  information, you have gained clarity on how you can pitch your idea to investors in Nigeria. Go ahead and put it into practice.

If you have any questions on this topic or a related on, let me know in the comments box below.

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Funding

Top 5 Ways Students Raise Capital For Business In Nigeria

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Business

When to Go For Funding In Your Business and Why

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In this article, I discuss with you the right time to seek funds for your business and why you should seek funds at that time. But before that, let’s take a quick recap on what business funding is – its advantages, and challenges.

What is a Business Fund?

A business fund is money an entrepreneur raises or which is provided to an entrepreneur by the government, an organization, friends, or family to start or grow his business. Business funding is the act of providing funds to support a business.

Advantages of Funding Your Business.

The advantages of funding your business are countless but I have a few to share with you today. First, funding your business will increase your capital. Business funding gives you chance to advertise your brand the more and make your products more unique and sophisticated. It helps to increase your profits margin. With business funds, you become more dominant in the market space.

The Challenges In Acquiring Business Funds.

Like is often said, whatever has an advantage does not come easy. Most of the time, some challenges go with it but your capacity to surmount these challenges make you the hero. There are many challenges you might face in trying to get funding for your business For instance, if you self-fund your business and the business fails, you will be left with nothing as you have invested virtually all your money into the business.

Another challenge is that if you receive the fund from your family members or friends, it might affect your relationship with them as some of them might brag or show off to others about the help you got from them, which you may not like. On the other hand, if you receive the fund from a bank or any credit institution and you failed to pay it, the bank will not end it well with you.

By now I think you have a basic knowledge of what business funding is – its advantages and the challenges that come with it. So let’s start our main discussion!

Funding is very essential to a business. But when is the right time to go for funding in your business and why should you fund your business at such time? Find the answers to these now in this detailed article.

Funding is very essential to a business. But when is the right time to go for funding in your business and why should you fund your business at such time?

When is the Right Time to Fund Your Business and Why Should You Fund Your Business at Such Time?

Funding your business at the right time will make it boost while funding it at the wrong time will cause your failure. Before telling you the right time to fund your business, here are a few tips to help you decide if it’s the right time to fund your business or not.

  • At what stage is your business right now?
  • What type of fund are you trying to get?
  • What are the available means of getting funds?
  • Are you going for angel funding or Venture Capital (VC) funding?
  • What is your conscience telling you?

If you ask yourself these questions and you feel that you are fit to fund your business, here are the best times to do so and why you should do so:

(1) When Starting Your Business.

After settling on what business you want to venture into, getting some funds to kick-start it won’t be a bad idea. Although most entrepreneurs self-fund themselves at this stage, you can still seek funds from family and friends to support it.

Why you should fund your business at this stage?

Funding your business at this stage will help you to make a good startup at the foundational stage of the business. With self-funding capital, you will start a well-established business and even if the customers do not show up as you expected at the initial stage of the business, you and your business will not go under pressure for fear of lack of money to pay back to creditors if you loaned or borrowed the startup capital.

(2) When Your Stock is Low.

Once you notice that your shop is getting empty and you don’t have money to buy products and restock, you should seek funds from family, friends, or the banks.

Why you should seek a loan at this time?

Well, you simply don’t have enough savings to take care of this, that’s why! If you had, you wouldn’t reach out for help. So, you should seek a loan at this time because your business is on the verge of failing! Yeah, since your stocks are down and you don’t have enough capital to buy new ones, your shop will be empty, and hey! Customers don’t like empty shops; they want to see your shop full of products.

(3) When there’s Competition in the Market.

This is a highly crucial time to fund your business! When everyone is perfecting their brands, making their business unique, and doing a trendy advert, you can’t stand there looking at them. You too must join the moving train and beat the competition to its game! Therefore, get some funds and boost your business. It’s very necessary to do so at this point.

Why You Should Fund Your Business At This Time?

Well, if you fail to fund your business at this time, you’ll be out of fashion and I guess you know what this means for your business. You know, your competitors are doing all that they can to make sales. Join them too!

Do adverts from Pay Per Click (PPC) Ads, TV commercials, banners, posters to social media advertisements. Do promos if possible and don’t forget to improve the quality of your products. In short, do everything that will make you to stand out from the crowd! To do this, you need money!

(4) When You Want To Expand.

If you have been thinking of how to expand your business and reach more clients, then funding it for expansion is what you should consider doing. For example, Mr. A sells men’s wears with a single shop in Port Harcourt. As time goes his business grows and he wants to open another branch in Lagos, he will surely need some money to do this. He’ll need money to rent or buy a shop, buy products, hire an apprentice, and gets a manager; you know he can’t be in two places at the same time. If he calculates it, he might see that opening that shop in Lagos can affect the one in Port Harcourt. Therefore, to prevent failures, Mr. A can go for a loan if his savings won’t meet his business expansion needs.

Why you should fund your business at that time?

Failure to expand your business at the right time might reduce your motivation. Another thing is that People like buying from big businesses; if they see that you have different branches in different places, they see you as a big brand and tend to patronize you over others. In fact, they can refer others to you because they trust your products and services.

(5) When The Market Is Not Favorable.

This is happening at this time, after the COVID-19 lockdown, the market has been unfavorable to many businesses across the country and the world at large. Many people used their business capital to cater to themselves during the lockdown and the inflation rate is high now.

As such, many people have/are thinking of abandoning their businesses but this is not the right option! The right option is to seek funds or liquidate your assets. To liquidate your asset means to sell off physical assets and convert them to money (liquid).

Why you should seek a loan at this time?

As a business owner, if you think you are not doing well, you should think of how situations will be if you abandon your business. At a time when the market is favorable, what you should do is to seek more funds, improve your business, and be patient. Remember, the patient dog eats the fattest bone.

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