Like a Virgin: Secrets They Won't Teach You at Business School

THE PERFECT PITCH

Banking is one of many industries where in too many cases any semblance of good customer service has gone the way of the dinosaur. As such, it is an industry that needs to be shaken up by a company that’s ready to take a fresh, new approach.

By no small coincidence therefore, we recently bought the British bank Northern Rock, which we’re rebranding Virgin Money. Our goal is not only to provide better customer service, but to return banking to its place at the core of a community and as the engine of the local economy.

When badly run, banks have a negative impact on business growth and development. In 1984 I remember arriving home from Virgin Atlantic’s maiden flight from London to Newark and finding our bank manager sitting on my doorstep, waiting to tell me that the bank was planning to close us down after the weekend. It was Friday. Fortunately, we rang around our suppliers and managed to deliver enough funds to the bank on Monday morning to avert the crisis. By Wednesday, we had changed banks.

Flash forward to the present and what seems to be a perpetually tough economic situation. Entrepreneurs who are looking to raise money – whether from banks, angel investors or venture capitalists – face tough conditions. Your best bet is to keep it simple, and be sure that your new business presentation touches on these five key areas:

Occasionally, an entrepreneur hoping to launch their first business puts so much thought into the concept that he or she neglects the financial and legal plan – and unfortunately, this often becomes apparent early in a meeting, when an investor can lack clarity in what exactly the proposed deal is going to look like.

Before you set up any meetings, gather your team and decide on your goals for your business and how much capital you need to inject to achieve them.

Will you accept money in exchange for a stake in the business, or does it make more sense to take out a loan? What conditions are you willing to have tied to those investments? How much in terms of shares of the company or of its future profits would you be willing to give up in return for start-up financing? Your potential financiers will likely ask these questions, so be ready to give clear, well-reasoned answers.

And as you prepare your presentation, remember that your future backers will want to know how soon they can expect to see a return on their investment as well as possible ‘exit strategies’.

Winning the trust of an investor means demonstrating a thorough knowledge of your concept or industry and laying out your step-by-step plan for offering something that’s new, innovative and will deliver healthy returns on their investment: aka ‘ROI’.

Explain how you will turn your great idea into a terrific service or lay out your manufacturing plans in detail. Demonstrate how your approach will provide this for less than people are willing to pay, therefore covering your costs and turning a profit.

Look them in the eye and inject lots of positive language like, ‘we will deliver’ and avoid wishy-washy phrases like, ‘it is hoped that’, ‘this should with luck’ or ‘could well result in’.

Emphatically explain how your new company will give your customers a better deal than your competitors. And if you think you don’t have any competitors, think again. If there is true potential for your concept then you can count on someone else rapidly jumping in to try and exploit the same opportunity.

If a bank or other investor is looking at your business they have almost certainly looked at your competitors as well. In your presentation, therefore, it’s imperative that you understand your competition and irreverently explain why your business will do better. Blow them away! Avoid being overly negative. At best, you will seem humourless and self-important, and at worst, like you don’t take your competitors seriously enough.

There will forever be new markets and new sectors emerging as things change and old businesses reach the end of their life-spans. Nothing stays the same for long, so explain how you plan to tackle the inevitable technological changes and market shifts that are heading your way.

Infinite growth may be impossible in a world of finite resources: so discuss your challenges in terms of resources and waste, and present a plan that inspires confidence in your new venture’s ability to sustain the community and the environment.

Do you have the team in place to take your business forward for the next decade, and do their CVs suggest that they’ll be up to the job? Show prospective investors that you have found the right people to work at your new company. Your backers will want to know their money will be in good hands. You also need to show that you have someone on the team who can take over from you the day you decide to move on to your next brave new venture!

The gloom about the global economy means your competitors may be scrambling to hold onto their customers. This is a great time to offer an innovative approach – at Virgin we are seeing an upsurge in innovation and new ideas. There are investors and banks that realise this and, if pitched the right way, are still willing to take risks.

So be assertive, keep your pitch confident, concise and clear and you may soon be seeing that unforgettable first investment cheque. Good luck!