Business Plan vs Pitch Deck vs Pitch Deck vs Elevator Plan
These will be for those looking to secure investor financing, knowing the differences will help smoothen the process of moving their business forward.
Although they are similar, a company executive's business plan,, and elevator pitch are distinct. For those looking to secure investor financing, knowing the differences will help smoothen the process of moving their business forward.
At a high level, the three schemes all describe a company and its plan, albeit in varying detail. Several key differences lead to different formats that serve specific objectives.
Investors review the business plan to give a final funding decision. For this reason, it is lengthy and text heavy.
The pitch deck is the preliminary investor presentation. At this stage, we seek to gain investor attention and interest that could lead to funding down the line. Because it is not the final step, this presentation is shorter but still detailed. Lots of imagery is used to convey ideas visually.
The elevator pitch is the first step; it is meant to spark an initial interest in the company. Because it is the shortest of the three, it hits only on the absolute core ideas. This pitch is completely verbal.
An overall summary of the differences between the business plan, pitch deck, and elevator pitch, respectively:
- Tens of pages vs. a ballpark of 10-20 slides vs. a quick verbal explanation
- Text focus vs. visual focus vs. verbal focus
- Funding-oriented vs. attention-oriented vs. interest sparking
Now let us look at each of the three in more detail to understand their differences truly.
A business plan is the most detailed of the three documents and explains everything there is to know about a business. However, the document is commonly lengthy because it is much more comprehensive than both the pitch deck and the elevator pitch.
Even though the business plan can be anywhere from 10 to 100 pages, it is important to write it with concision in mind still. This should not necessarily be at the expense of detail, though.
What exactly is included in terms of content? The business plan is how you plan for your business to both grow and operate in the intermediate future (this can be anywhere from 1 to 5 years). Business plans should ensure that they include the following:
- Executive Summary
- Business Overview
- Operational Plan
- Market Analysis
- Products and Services
- Sales and Marketing
- Competitive Analysis
- Management Team
1. The Executive Summary
It is an overview of the entire document. It hits on the key points from each section. An indication of a solid executive summary is whether or not it could stand alone as a separate document. If it could, then it is likely a sufficient summary.
2. Business Overview
The business overview should describe some basics about the business. These would include how the business was formed, its legal structure, where it is located, what type of business it is, and the means of conducting business.
3. Operational Plan
The operational plan should explain how the business will operate and function. Different teams and their responsibilities should be included.
4. Market Analysis
Market analysis details and explains your plans to fulfill customers' needs.
5. Products and Services
The section on products and services explains all the products and services being sold, how each product is categorized within the business and its model for generating revenue, and a concise description of each product.
6. Sales and Marketing
The overview of sales and marketing will outline pricing and other sales information. This includes why these price points were chosen and why customers will be willing to purchase at that price point.
In addition, strategies for reaching customers and driving sales will be described here.
7. Competitive Analysis
For the area dedicated to competitive analysis, competitors in the market are examined. In addition, comparisons of strengths and weaknesses of the company should be mentioned, as well as a plan to rise above the competition.
8. Management Team
The management team section exists primarily to drive trust. It provides reasons why the team is uniquely qualified to tackle the challenge the market presents.
9. Financial Plan
The financial plan should be very detailed and leave nothing to surprise. The cost of starting the business and expected costs for the next few years should be included.
In addition, it should also cover how these costs are spread and if more funding will be needed down the road.
Finally, projections ofpresented, will grow and will look like in a few years.
Final tips: When writing, it would be helpful to be realistic with challenges and expectations. Creating a plan that overstates what can be expected will only lead to unforeseen problems. Investors will also likely be able to tell whether or not your expectations are excessive.
A pitch deck is typically created for potential investors' review. Then, it is put together to begin conversations about financing the company.
To best convey the main points of an otherwise lengthy presentation, the pitch deck summarizes a company's information rather than going into complete detail.
As denoted in its name, a pitch deck is normally presented in the form of a deck of slides. However, instead of being text-focused, these slides tend to be image-heavy, providing visual support to investors.
While images should make up the bulk of the content, it could still be worthwhile to include some text with key business information for potential investors' further review after the presentation.
We have already established that the full business plan ranges from 10 to 100 pages. In comparison, the pitch deck is much shorter – it is usually between 10 and 20 slides.
What should be included? Though the content is up to the presenter's discretion and depends on what best highlights each company, certain topics should be touched upon.
- Value proposition and brand positioning
- Revenue model, roadmap, sales, and marketing strategies
- The team and competition
- Financials as well as plans for funding
As discussed in greater detail in the elevator pitch section, the value proposition and brand positioning statement answer many simple questions about what the business offers.
In addition to answering these basic questions, the value proposition and brand positioning section should also discuss the ideal customer and the market as a whole, specifically market sizing.
The revenue model, roadmap, sales, and marketing strategies section should include figures detailing your pricing strategy and how that compares to your costs. What does the rollout of your product or service look like, or has it already begun?
Other questions investors may have that are answered in this section include growth projections and justification for those forecasts. Are prototypes generating lots of interest?
Are there existing products released, and if so how much traction do they have? Is growth expected to come from new releases or existing products?
Then, the marketing strategy is discussed to address how and why it will expand the business's existing traction and profit expectations.
Moving forward, in the team and competition section, the reason why the business team is best prepared to deal with any challenges the market presents is listed.
Moreover, the following questions are also considered in this section: How does the executive team stack up against competitors, and what is the team's? Do comparisons present a challenge, or is the team looking to emulate other similar companies?
Finally, when investors have more of a complete understanding of the company, the section about financials is presented.
The following questions are typically considered in this section: What is the current financial situation of the company, and whatdoes this lead to? Why is the funding needed, and how will it be used moving forward? Is more funding likely to be needed?
Once again, when discussing funding and valuation, it is best to be realistic. Investors will form a valuation opinion themselves anyway.
If the valuations provided by the business match the investors' expectations, it will give the investors the impression that the executive team has a solid understanding of the market.
Overreaching estimates will only generate more issues for the company in the future.
Finally, we have the elevator pitch. The elevator pitch is the most summarized version of the three.
Given its name, the pitch should be presented in a short time frame; ideally, within the length of time it takes for a lift on the elevator. It should not take more than 30 seconds.
Because an elevator pitch is so short, it is important to be once again concise in conveying ideas. It is, in fact, quite logical to even have a rehearsed pitch in advance to make sure all the main points are touched upon efficiently.
The key: Think of the pitch as a hook, touching on the absolute fundamentals of why the company is an innovative and profitable idea.
What might this include? We can approach it in a few ways; two examples below are through value proposition and brand positioning.
Value proposition asks the key questions:
- Who are we?
- What do we do?
- Why does it matter?
A well-conveyed value proposition should explain why the company exists and demonstrate that your team is internally aligned (meaning that there is motivation towards a clear purpose).
Beyond just creating interest, the value proposition helps establish a purpose of the business that is more profound than a mere market opportunity.
Communicating this concept will implicitly improve how your audiences perceive the business idea and help drive trust if they want to invest.
We can also consider the fundamentals of the brand positioning statement:
- What is the target market?
- What is the frame of reference for our audience?
- What key benefit do we bring?
- What reasons do consumers have to believe in our product or service?
Discussing the target market shows to whom your company is relevant and frames your business in a value-focused way.
The frame of reference further expands upon why your business idea could profit by analyzing how the competitors in the market are meeting market demands. Examining their shortcomings leads nicely to explaining why your brand would stand out.
The critical benefit further discusses this idea with an emphasis on the customer. This section should address the following questions: What exactly is offered to customers? Is it something completely new? Or is it a modification of something already offered?
The final section should include the reasons why your product or service is better than others from a customer's perspective. Does it check all the boxes of customer requirements?
Does the company also differentiate itself from competitors in a way that makes it more appealing? Again, these concepts are the backbone of creating trust in both consumers and investors.
Other aspects that can be worth including in the elevator pitch are a brief introduction about yourself (optional) and a conclusion inviting interested investors to contact you (recommended).
Including a little about yourself at the beginning of the pitch may help build credibility with the person listening. Most of the pitch, however, should be about the business idea itself.
Closing the pitch with a call to action helps move the process forward. The goal of the pitch is not to fully sell your idea but to peak interest and lock in a second, in-depth conversation.