Business Basics: Pitching for funding – how to get it right

23 August 2017

This is why we’ve created the Business Basics series, a monthly insight into different aspects of running a successful small to medium sized enterprise (SME). We sit down with industry experts and ask them to share their knowledge and a series of tips to help SME owners and small business managers. 

In this month’s instalment, we talk to Kevin Cook,  SME growth consultant with national network Business Doctors. Kevin talks about one of the most vital parts in the early stages of many businesses – pitching for funding. 

business basics

Read on for our full Business Basics interview with Kevin below.

How should businesses determine exactly what their funding needs are, and what kind of capital investment is best suited to their requirements? 

Initially, a business should look to have an all-encompassing strategic plan that outlines a 3-5-year vision. This should include scope for turnover and profit targets as well as highlight any significant activity that will underpin the plan. For example, a premises move, increase in staff numbers, or cash flow funding to deliver larger supply or delivery contract. By its nature, the financial aspects of this plan would not be detailed down to a weekly cash-flow model, but seek to highlight where and when lack of funding would impact on the plan. 

Where might businesses look to find potential investors and sources of funding? 

There isn’t a one-size-fits-all answer to this question. Some businesses are able to fund their operation and growth by the use of conventional bank products such as basic overdrafts, loans and invoice financing. For large machinery or equipment purchases, asset financing is often a cost-effective and simple way to finance capital expenditure. 

If significant funding is required, then the next tier of finance might come from crowd funding, angel investment, equity partners or even venture capitalists.  Each source will have a different direct cost and, in the case of the last three, a potential impact on the share structure of the business.


A business actively seeking investment to grow should be in the best possible health. What steps can an owner take to get their company or product investment-ready? 

Speaking as a strategic planner, having that clear visionary plan of what the business is trying to achieve is crucial. A clear budgetary plan aligned to those goals is also imperative as it demonstrates both planned profitability but will also highlight funding gaps within that journey. 

Operationally adequate management controls on all aspects of production, operation and finance help owners ‘get on top of their numbers’ and help focus on the oft-quoted mantra of ‘turnover is vanity but profit is sanity’.

pitching for funding

Being able to articulate a compelling value proposition is crucial to securing buy-in for any business. What advice do you have for owners trying to define their key pitch messaging? 

Take the time to challenge yourself on what makes your business special.  That is difficult to do internally (a little like checking your own homework at school – it seems perfect to you!), consequently use an external consultant to bring that challenge to your thought process here.  Our clients often remark that the most valuable part of our support is exactly the external perspective and challenge that we bring to their business. 

Work on explaining what differentiates you from your competition, why do your customers/clients buy from you and what gives you the edge in a multi-channel, highly competitive world.

Business plans and forecasts are obviously essential for establishing credibility, but what role should they play in the overall process? Should they be part of the core pitch, or supplementary material?

The high-level visionary plan is a clear statement of intent and demonstrates to potential investors/funders that you have thought about all the angles that could impact upon your business.  That should be fundamental to the core pitch.  It is extremely useful in painting a picture of anticipated growth and practical/financial hurdles that will be faced by the business as it expands.

That plan can reference more detailed sales plans, budgetary and cash-flow forecasts which can be provided as supplemental material to underpin the story of how the business will achieve its goals.

Demonstrating traction is important for validating a business model or idea – and for instilling confidence in potential investors. What evidence can businesses use in their pitch to achieve this?

Traction can be demonstrated initially by providing a picture that the management of the business (and consequently the investors’ money) is in safe hands.  Pitching just an idea, with no proof of market or previous success is incredibly difficult when any investor (no matter what type) will be looking for security and a return on their investment.

If the business is already operating, then client testimonials or endorsements can help paint the picture of a competent and trustworthy business. 

What are some of the most common pitfalls that ruin otherwise compelling pitches, and how can they be avoided?

To a potential investor, either a fundamental flaw in the projections or a lack of reality in the vision for the business is often the pitfall that ruins the pitch. 

As mentioned previously, the use of an external consultant to challenge the fundamentals of the plan and forecasts is the best way to avoid these mistakes. As the business owner, you will rightly be proud of your creation, but also potentially blinkered in your approach. Having an external challenge to your concepts and ideas before you are in ‘the dragons den’ asking for money is the best way to avoid those pitfalls.

What about the pitch presentation itself – how long should it be, how should it be structured, and what key information should it contain?

The length of a presentation should be relative to the scale and complexity of the investment being sought. Typical pitches will last between 30 and 90 minutes if there is a grilling by a panel involved.

Treat it like an essay with an introduction, a middle and a conclusion.  The introduction should be personal and explain a little of the history of the business.  The body should outline the growth steps identified and the key requirements for funding. Summarise succinctly at the end of the presentation and then invite any questions. 

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pitching for funding

And finally, which members of the management team should attend the pitch? The owner will need to be there, but is it important to have the person in charge of finances present, too? 

Having already mentioned that any investor will usually be looking for a safe home and decent return on their investment, the pitch presenters need to be able to convey in a relatively short time period, their personal competence and ability to deliver on their plans.  Demonstrating the depth of the management team is a good way to secure the funding. The owner, together with whoever is in charge of finance and indeed sales, should be able to deliver a powerful and compelling case for funding approval. 

If you’ve enjoyed this article, don’t forget to read the rest of the Q&As in our Business Basics series. You can do so using the following links.

Have you enjoyed this article? Don’t forget to check out the rest of the Gazprom Energy blog and newsfeed for more of the latest articles and features. Alternatively, to find out about our range of business energy services, visit the homepage or call us today on 0161 837 3395. 

The views, opinions and positions expressed within this article are those of our third-party content providers alone and do not represent those of Gazprom Energy. The accuracy, completeness and validity of any statements made within this article are not guaranteed. Gazprom Energy accepts no liability for any errors, omissions or representations.

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