The first step to getting investors for your business is crafting a stellar business plan. With your business plan complete you will move on to creating the pitch deck. The pitch deck will include an overview and summary of your entire plan, in an effort to entice potential investors to consider the full plan. Among the important aspects that will be covered is the financials. There will be far more detailed Financial Projections in your business plan than will be shown in the final pitch deck.
The detailed financials of your business plan will cover all the financial statements you would expect to use to run your daily business. This includes the income statement, the statement of cash flow, and the balance sheet. You will likely also have a break-even analysis.
The income statement is typically projected out 3-5 years, in yearly increments. The first year will be broken down by month. The statement of cashflow is likely to follow the same format. Unlike the other statements, which show movement from one period of time to another, the balance sheet shows a snapshot in time. This will also be projected in the financial projections of your business plan but, it is important to understand this distinction.
Unlike the detailed financial projections in your business plan, the financials you present in a Pitch Deck should be select and highly summarized. How do you know exactly what to include? The short answer is it will depend. If you have a particularly impressive aspect, you may want to present that. At a minimum, your pitch deck should include these two following sections.
Top Line Industry Snapshot
In order to justify and better understand the potential for the financial projections of your Business Plan, you will also look at industry financial data. You will likely go in detail about this in the business plan but, in the pitch deck you will include:
Total industry revenue for the current or prior year
Total industry segment revenue (if applicable) for the current or prior year
Expected growth rate year over year
- Estimated total industry and/or segment revenue in 3 or 5 years
Condensed Income Statement
Despite having multiple financial projections in the business plan, the one that will be of most interest initially is the income statement. This will not be the fully detailed income statement. You will likely include an abbreviated version of Year 1, 2 and 3 OR Year 1, 3, and 5. You could show all five years but that tends to be a bit overwhelming, plus it doesn’t give as great an impact of demonstrating growth.
The numbers that should be shown is:
Total Revenue
Costs of Goods Sold
Gross Profit (Revenue less Cost of Goods)
Gross Margin (expressed as a %)
Operating Expenses
EBIT (stands for: earnings before interest and tax)
- EBIT margin (expressed as a %)
If there are any highly relevant or impressive numbers, you should show them as well but, they need to be warranted. If they don’t fit within the pitch book summary, you can also note them in a footnote.
There are other parts of your Financial Projections from your business plan you may want to include in the pitch deck but, keep it limited. It is important to remember that the purpose of the pitch deck is to give a brief overview of your business in order to draw attention to your entire business plan. Start with the basics presented above and only add additional financial information if it truly makes sense and adds to the Pitch Deck.
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