How to Create a Business Model Slide for Your Pitch Deck?
Imagine the impact of presenting a compelling business model pitch deck slide that leaves investors eager to learn more about your venture. By adopting the correct strategy, you can inspire confidence in your audience and generate enthusiasm for your project. But how do you achieve this level of engagement? In this guide, we will delve deep into all the details to provide you with answers.
1. What is the Business Model Slide in a startup pitch deck all about?
The business model slide serves as the foundation of your pitch deck, providing investors with insights into how your company plans to make money. It demonstrates your understanding of your target market, competitive landscape, revenue streams, and shows how your company plans to generate revenue.
A well-designed pitch deck business model slide provides investors with all the key information they need to make a decision about investing in your startup. Knowing this is already a good vector to convey all necessary details in a concise and easily digestible manner.
There are several types of business models, each designed to fit various industries, markets, and goals. Some of the most common types include:
- Subscription-Based Model: Customers subscribe to a product or service and pay a recurring fee at regular intervals, such as monthly or annually. Streaming platforms like Netflix and software-as-a-service (SaaS) companies like Adobe Creative Cloud are examples of this model.
- E-Commerce Model: Businesses sell their products or services online through digital platforms. These platforms offer features such as shopping carts, secure payment gateways, and detailed product listings. Amazon, eBay, and Shopify are well-known examples of such platforms.
- Freemium Model: This model provides a basic version of a product or service at no cost, with the option to access additional features or premium content for a fee. Apps such as Spotify and Dropbox adopt this approach, attracting users with free access while providing the option to upgrade for added functionality.
- Marketplace Model: Facilitates transactions between buyers and sellers by providing a platform where they can connect and conduct business. Examples include Airbnb, which connects hosts with guests, and Uber, which connects riders with drivers.
- On-Demand Model: Offers products or services that are immediately accessible and fulfill a specific need or demand. Food delivery services like UberEats and ride-hailing apps like Lyft operate on this model, providing instant gratification to users.
- Franchise Model: Allows franchisees to operate a business under the branding and support of a larger franchisor. Fast-food chains like McDonald's and retail outlets like Starbucks often use this model to expand their reach while maintaining consistency in branding and operations.
- Direct Sales Model: Involves selling products or services directly to consumers without intermediaries, typically through methods like door-to-door sales, home parties, or online platforms. Avon and Tupperware are examples of companies that utilize direct sales models.
- Razor and Blade Model: Offers a product at a low or subsidized price to encourage adoption, with the intention of generating recurring revenue from complementary products or services. Printer manufacturers often employ this model, selling printers cheaply and profiting from sales of ink cartridges.
2. Why Is the Business Model Slide So Important?
Ever wondered how a mere slide in a pitch deck holds the power to shape investor perception and drive funding decisions? Picture this: You're a venture capitalist sifting through a sea of startups, each vying for your attention. Amidst the noise, what draws your eye and piques your interest? It's the business model slide. But why is it so pivotal? Let's delve deeper into its significance.
The significance of the business model in a pitch deck cannot be overstated. It serves as a roadmap, guiding investors through the intricacies of your business model. It provides clarity on revenue streams, cost structures, and scalability. This gives investors insight into the viability and potential of your venture, and effectively represents your idea and team.
3. What is Included in the Business Model Slide?
The business model slide is key to any startup pitch. Serving as the bedrock of your presentation, it's crucial for explaining your business model, revenue generation strategy, and the unique value proposition your startup brings to the table.
A great business model slide should include up to 6 basic components:
- Company Overview: Provide a concise summary of the company's operations, target market, and revenue generation strategies. It should also emphasize what distinguishes the company and its unique value proposition.
- Target Market Description: Explain who the company is targeting and its strategies for engaging with them effectively. Additionally, it should incorporate any relevant market research or customer insights that substantiate the chosen target market.
- Revenue Generation Strategy: Include a detailed pricing model, revenue streams, and monetization strategies, accompanied by financial forecasts demonstrating future earnings potential. Furthermore, add the information about your average order value and upselling techniques, providing insights into maximizing revenue per customer interaction.
- Key Activities: Identify the core business activities that drive your business forward and create value for your customers. Whether it involves product development, marketing initiatives, or customer support, prioritize activities that harmonize with your business goals and bolster your overarching success.
- Value Proposition: Explain why customers will choose the company over its competitors, as well as what makes the company stand out from its competitors. It should also include any customer testimonials or case studies that demonstrate customers’ satisfaction and loyalty.
- Cost Structure Explanation: Detail the costs associated with running your business, including production costs, overhead expenses, marketing expenses, and any other operational costs. This shows investors that you have a clear understanding of your financial requirements. It delves into why you can achieve a return of $3, $6, or $10 for every dollar spent, highlighting your unit economics and customer lifetime value (CLTV).
💡Illustrate your business model into a transaction cycle, illustrating how customers engage with your business from initial contact to conversion.
You might think that following all the advice will overcrowd your business model pitch deck slide. However, that's not the case. With the help of a specialist, you can design it without using a lot of text. Infographics work perfectly for this slide, conveying information visually and keeping it concise.
4. How to Present Business Model Slide Effectively
When presenting your pitch deck, make sure that the business model slide has a strategic position, typically following the introductory slides that introduce your company and its founders. It allows you to effectively set the stage for the rest of your presentation by providing a clear roadmap of how your business operates, makes money, and delivers value to your target audience.
Also, take into consideration how you will present it. Will you be sending an email or pitching live? How much time do you have?
We've compiled some essential tips to guide you. Follow these to ensure your pitch deck, because delivery makes a difference.
- Focus on Clarity: Don’t forget to include the core elements of a business model — customer segments, value propositions, channels, etc. Investors need to understand how your business makes money.
- Practice Financial Terms: Mastering financial terms is essential for effectively communicating your business's revenue streams and profitability. Strive to understand these concepts so thoroughly that you could explain them effortlessly even at 3 am. Simplify complex terms to ensure clarity and enhance your ability to convey your business's financial processes with confidence and ease.
- Key Components: Don’t fill the slide with paragraphs of text. Investors skim, so organize your material, use strong verbs, and visuals to convey your message.
- Highlight Strengths: Emphasize any unique competitive advantages you possess. This could be innovative technology, strategic partnerships, or a disruptive approach to the market.
- Storytelling Power: Simply reading the text on the slide instead of using it as a springboard for a captivating story isn't a good strategy, do exactly the opposite :)
- Customize for Different Investors: Tailor your pitch to each specific investor, addressing their interests and investment preferences. Personalizing your presentation demonstrates your commitment and understanding of their needs.
- Conciseness is Key: Keep your business model slide concise and impactful. Aim for clarity and brevity, presenting information in a succinct manner that sparks further conversation.
- Be Prepared to Elaborate: Anticipate potential questions from investors and have additional details ready to provide further insights into specific aspects of your business model. Being prepared demonstrates your thorough understanding and readiness to engage in deeper discussions.
5. Visualization Tips and Common Mistakes to Avoid
Following the advice below will definitely save you time and avoid common mistakes that many people make.
Do:
- Use High-Quality Images: Grainy or pixelated visuals create a negative impression. Use high-resolution visuals that showcase your product clearly.
- Consistent Formatting Style: This includes using clear and readable fonts, consistent text sizes, and proper alignment to ensure a cohesive and professional appearance throughout your presentation.
- Enhance Visual Communication: Utilize visuals such as charts, graphs, and infographics to convey complex information in a digestible format. Ensure that visuals are clear, concise, and relevant to the content being presented. Incorporate color and design elements to enhance visual appeal while maintaining professionalism.
- Provide Context with Annotations: It can help clarify information and ensure that your audience understands the significance of each visual element.
- Customize for Live Speech: If the presentation is shown on a projector, then use contrasting colors for the text and background.
- Proofread your content, especially if it's not your native language.
Don’t:
- Don't use irrelevant graphics or visuals that do not match the context of your presentation.
- Don't make it hard to understand. Keep your words short and clear.
- Don't promise too much or ignore feedback. That can make investors doubt you.
6. Business Model Slide made by Reprezent presentation design agency
When we began in 2014, there was scarce information available in the market. Consequently, we started building our own knowledge library, testing principles one by one. With over 1500 presentations under our belt, we've put theory into practice. Here, we've compiled excellent examples that can inspire you and provide valuable ideas. Here are some of them:
Examples from Reprezent projects
Key Takeaways
- Business model slide is the foundation of your pitch, detailing how your startup plans to generate revenue and stand out.
- Identify common types of business models.
- Crucial for guiding investors through your business model, offering clarity on revenue streams, costs, and scalability.
- Include company overview, target market description, revenue generation strategy, key activities, value proposition, and cost structure explanation.
- Infographics can convey information concisely and engage investors without overwhelming them with text.
- Focus on clarity, master financial terms, highlight strengths, tell a compelling story, customize for investors, keep it concise, and be prepared to elaborate.
- Use high-quality images, maintain consistent formatting, utilize relevant visuals like charts and graphs, provide context with annotations, and customize for live presentations.
- Ensure your content is error-free and effectively communicates your business model, especially if English isn't your native language.
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