How to Make a Pitch Deck for Investors Part 6 – Your Solution Slide
Part 5 of our mini series on how to make a pitch deck for investors to raise money for your company in 13 slides.
In this episode we explain exactly what to put on your fourth fifth slide, your Market Opportunity Slide. And…
We give you exactly how to set up your market slide, what to say when you are presenting to investors and…
A huge mistake to avoid that almost all entrepreneurs get wrong when pitching investors. If you make this mistake investors will roll their eyes because they know you don’t know how to size your market correctly.
What is this Perfecting Your Pitch Mini Series?
We’re perfecting your pitch so you have the very best chance to raise the money from investors to take your business to the next level.
If you want to raise or borrow money you need the right pitch deck. Do it wrong and it’s the difference between raising the money you need for your business and not raising any.
You’ll get it right by following this simple, proven, battle tested thirteen slide pitch deck outline.
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Hello Friends. Welcome to the show. Today we are continuing our miniseries for you on how to make a pitch deck for investors so you can raise money for your company. And we are on slide number five. Quick review where we’ve been so far. We did slide number one. Which is your elevator pitch. We did slide number two. Your problem slide. We did slide number three. Your solution slide slide number four, your product slide. And today we’re tackling your market opportunity. Here we go.
Welcome to build the business success secrets. The only podcast that provides straight talk for entrepreneurs whether you’re an entrepreneur starting with an idea or growing your business. This show is for you. We’ll teach you how to build a strong mindset, powerful body and profitable business so you can achieve success. And here’s your host, Brandon. See white slide five, your market opportunity.
I want to say something up front before we get started so that you don’t make this mistake. And I’ve seen a lot of entrepreneurs and business owners make it and I made it in my early days and that is building a market opportunity slide or strategy from the top down. An example of that would be, let’s use the automotive parts market, it would say that It’s a huge market, it’s $7.4 billion 15 a year and we’re going to capture one of that market and we’re going to make $30 million dollars a year in revenue in two years. That’s great math. But it’s not a strategy and it’s not realistic. And what’s going to happen is is you’re going to pull your hair out at the end of the day when you’ve been working because you can’t figure out how you’re going to advertise to this large market that you believe is out there and actually reach them.
And then what happens is you wind up reaching none of them. What you want to do is build your market analysis from the bottom up. I’m going to give an example today of an italian restaurant, let’s say you are opening a italian restaurant, here’s how you would figure out how much potential revenue you could make based on where you are opening it. And then once you have this you could use it and say I’m going to open two restaurants, three restaurants for restaurants.
Let’s use my hometown of half Moon Bay, California. And let’s say that there are 50,000 households within a 20 minute drive. Now we need to figure out what percentage of those households like italian food. So I came up with the number 35% and that you can actually find all of this sort of research out there in the government keeps track of all of the industries in the economics department of our government. So you can check that out online. But just to give you an idea and I’ll talk about what resources you can use to find this type of information.
But just follow me here. Local restaurant, local residents within 20 minute drive is 50,000 households, 35% of those people like italian food. So that gives us about 17,500 households. The average household within this demographic is about two adults and two Children. That gives us a total universe of adults of 17,500 times two. So 35,000 adults and the same thing for Children. So 35,000 Children. Now, what we figure out is our average revenue per family of four when they eat.
You would get this number because you built your menu and you would say that here’s the average menu price. And what I came up with in my fake menu is $59 for two parents and two kids to eat at this italian restaurant that we’re going to open Now we break down the percentage of households that will pay $59 to eat out because not everybody is going to pay $59 to eat out. I estimated that 30 of those households based on household income data would be able to afford and want to eat at our Italian restaurant.
So now what we have is 17,500 Families divided by three, which he calls 5,833 households. Next, we need to make an estimate of how many times a family will eat out a week. And I said to So now what we have is 5,833 times do, which is us, 11,666 meals a week potential market for people who like Italian food. This does not mean that they don’t like other things as well. So how many will eat italian food for at least one meal? I estimated 40%. So the number of meals potential for the Italian restaurants equals 11,666 times 40%, which equals 4,666 stay with me. I know that this is hard, especially listening to it.
And my point here isn’t that you remember the numbers but you start to think about the process that I’m talking about here so that you can build it from the bottom up. We’re not finished yet because there’s how many italian restaurants in our town. I went to google maps. I search there’s five so the total addressable market a week equals 4,666 times $59, which equals $275,294 of potential revenue. That means that there’s about $14,315,288,000 worth of total addressable market throughout the entire year. And then if we say that we are going to get a piece of that market, which we said we were going to get 40%. So that’s about 933 Meals a week at $59 per family.
That gives us about $55,047 a week in revenue. Again, it’s even hard for me reading all this that I came up with when I did this in a spreadsheet. However, What’s important is is that you understand that how we’re approaching this and we’re building it from the ground up because to say that Italian food market in the United States is $92 billion one of it doesn’t work. It’s not even a strategy. But with this, we can now understand with a good idea what are predictable revenue is going to be, how much money we’re going to make in a profit and the numbers that we have to hit. So that you can see that this is not only shows your analysis to an investor, that you understand what you’re going to do, but it also set your goals so you know what you’re going to hit.
So again, make sure that you’re building this from the ground up in a way that I like to present it on the slide is circles within circles, and I will talk about the total market, the total adjustable market, the serviceable available market and our market share, which is effectively what we just did here with the italian restaurant. So start working on your market opportunity slide, work from the ground up and see what number you get you soon. Thanks for being generous with your time and joining us for this episode of build a business success secrets.
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