Pitch deck VS Business Plan

As an entrepreneur which one you should be focusing on at first? A business plan or a pitch deck?

The entrepreneurs and business owners for decades have believed that they need to focus on creating a comprehensive business plan and there were enough good reasons for that. But this has recently started happening that, many startup owners have almost gone exclusive with pitch decks in the place of a traditional business plan. Know that which among these two approaches, or whether both or using them one after the other will work the best for you depending on the type of your business or your fundraising efforts?

A traditional business plan lays out all of the parts of the business and is a purely text-based and fairly lengthy document. There is everything present in a business plan from the corporate structure to the startup needs, to the marketing and growth plans, and also the financial forecasts for the coming five years. It also includes the much longer-term game plan. A business plan begins with a brief executive summary and is made typically in a Microsoft Word style format.

Now, on the other hand, a pitch deck is a slide-by-slide presentation just as PowerPoint or Google Slides formatting. It is quite a simple, short, and compact version of a traditional business plan. They specifically came into working for pitching the startups to the potential investors for their fundraising and are also replacing business plans at a fast pace.

Why a Business Plan?

Are business plans still relevant among entrepreneurs these days? The answer to this is both yes as well as no. We know what failing to a plan means, therefore, it is a must for every business and entrepreneur to have a plan. Creating a business plan will help you in giving depth and length to whatever plan you have for your business. It provides a lot more clarity than you can ever fit into a pitch deck. Thus it helps the entrepreneurs really think through the big vision and long-term game plan of your business. It helps you explain your marketing plans, cash flow needs, startup costs, and financial projections more finely and deeply. It also gives a foundation and framework to start building on.

The Pros & Cons Of A Business Plan

Pros:

• Forces potential investors to think through your business details • Gives an in-depth plan and awareness of your actual requirements. • Provides something tangible to back up your business hype. • Offers credibility with early investors and potential partners • Makes you prepared beforehand in case you are asked for it. • Contributes a comprehensive guide and roadmap to follow

Cons:

• Higher chances of no one reading it again. • There is a constant change happening, most of it may become irrelevant in just a few months. • May turn out to be worthless in terms of the amount of your time, energy, and momentum given. • Several entrepreneurs get jammed here and miss out on their best opportunities. • Offers negligible returns to all the additional expenses made.

Why a Pitch Deck?

Pitch decks are synonymous with startup fundraising. Yet, it is not exclusively tied to only fundraising, instead, it is a visual presentation that helps potential investors learn more about your business. It fascinates the investors to engage with your business by showing a compelling story.

In fact, you’ll find pitch decks useful from even before day one to throughout your exit like in:

• Shaping your initial concept and model • Gaining feedbacks initially • Cofounders recruitment • Advisors enrollment • Hiring the key team members early • Online and offline pitching of investors • ecuring strategic and customer partnerships early through multiple rounds of fundraising. • Reaching an exit

Pros & Cons Of A Pitch Deck

Pros:

• Required while raising capital • Creating a mini business plan within a streamlined framework • Updated efficiently and very easily for multiple purposes and overtime • Created in much less time • Chances are high of using and referring to it quite often • Can be shared quite easily. • Allows to easily get down to business much faster

Cons:

• An excuse for not having a real plan or model • Causes dangerous gaps in the plan from not thinking through the details • It leads to an absence of preparation when a business plan is requested • Lays more emphasis on fluff and hype than substance • Quite a short term outlook