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Perfect Your Pitch
Using the Business Model Canvas as Your Pitch Deck Blueprint
Steven Williams
May 31, 2023
Hi, this is Steven from Drop. If you’d like to see if we can help you grow your business get in touch today.
In today’s email:
We look into the fundamental building blocks to better understand your company’s overall business model and how to apply it within your pitch deck to easily communicate with potential investors.
Perfect Your Pitch: Using the Business Model Canvas as Your Pitch Deck Blueprint
Customer Segments
Value Proposition
Channels
Customer Relationships
Revenue Streams
Key Resources
Key Activities
Key Partnerships
Cost Structure
Tools to help you grow
Perfect Your Pitch: Using the Business Model Canvas as Your Pitch Deck Blueprint
Before you get started on your pitch deck for potential investors or stakeholders, it's a good idea to start with a bit of groundwork - mapping out your business model. That's where the Business Model Canvas comes in. It's your first port of call, a strategic tool for visualising, understanding, and explaining what your business is all about. Once you've got your business properly mapped out on this canvas, you're all set to start creating your pitch deck. Essentially, the pitch deck is your Business Model Canvas in a more detailed format, transformed into a compelling story designed to wow and win over investors.
What Is The Business Model Canvas?
The Business Model Canvas, enables entrepreneurs to visualise, develop, and communicate their business model. This invaluable resource is extensively utilised by start-ups and established businesses alike. With a well-crafted Business Model Canvas, your can then create your pitch deck that won't merely convey information - it will inspire confidence and secure investments.
The Business Model Canvas encapsulates the nine essential building blocks that underpin a successful business. This encompasses crucial elements such as the value proposition, customer segments, revenue streams, key activities, resources, partnerships, and cost structure.
It's important to recognise that these nine steps are interconnected, working in harmony to create a holistic business model. Each component plays a vital role, and neglecting one can have repercussions for the entire system. By delving into each element individually, you can cultivate a deeper understanding that will prove invaluable for your business in the long run.
The 9 building blocks:
Customer Segments
Value Proposition
Channels
Customer Relationships
Revenue Streams
Key Resources
Key Activities
Key Partnerships
Cost Structure
Let's take a closer look at each of them and how they can be utilised when crafting the perfect pitch.
Customer Segments
Customer segments refer to the different groups of customers that a company targets with its products or services; essentially it describes the different groups of customers that a business serves; in essence your target market.
By identifying and understanding the needs and preferences of these different customer segments, companies can tailor their offerings to better meet those needs and increase engagement.
Understanding the needs and wants of different customer segments is essential for developing a successful business model. Investors will want to see who it is you will be serving and if the market demographic sector is big enough.
To identify customer segments, companies need to conduct market research and analyse customer data to understand the different groups of customers that they serve. This may involve looking at demographic information such as age, gender, income, and location, as well as psychographic information such as lifestyle, values, and personality traits.
Once customer segments have been identified, companies can develop targeted marketing and sales strategies to reach those customers. This may involve creating different product or service offerings for different customer segments or tailoring marketing messages and advertising campaigns to appeal to specific groups of customers. All of which can be represented with your pitch deck, to best portray this message to investors.
Value Proposition
This building block describes the unique value that a business offers to its customers and how it differentiates itself from competitors. It answers the question, "Why should customers choose our product or service over our competitors?" In essence, what is your company’s USP vs other competitors?
In essence, a value proposition is a statement that describes the unique benefits that a company's products or services offer to its customers. It should explain why a customer should choose to do business with that company instead of its competitors.
A strong value proposition should be clear, concise, and easy to understand and should focus on the key benefits that the company offers. Explain why those benefits are important to the customer. Ultimately, a strong value proposition is essential for any business that wants to succeed in a competitive market.
Channels
Channels, as used for the Business Model Canvas, refer to the various ways in which a business reaches its customers. And this applies to channels, or marketing strategy sections, in your pitch deck. These channels explain to investors how you will reach your desired target audience and can include both physical and digital means.
Physical channels may include brick-and-mortar stores, sales reps, or other face-to-face interactions whilst
Digital channels, on the other hand, may include a company's website, social media platforms, digital advertising or other online channels.
Understanding the most effective channels for reaching different customer segments is essential for maximising sales and profitability. For example, a company that sells luxury goods may find that physical channels, such as high-end retail stores or exclusive events, are more effective for reaching its target audience.
In contrast, a company that sells low-cost consumer goods may find that digital channels, such as social media advertising or e-commerce platforms, are more effective for reaching a wider audience.
It's important for businesses to carefully consider their channel strategy and show clear, concise and simple methods in how this will be achieved. Also, always continuously evaluate and refine this over time; tweaking your methods to achieve maximum exposure. This may involve testing different channels to see which ones are most effective or using a combination of channels to reach different customer segments.
Ultimately, the goal of a channel strategy is to ensure that a business is reaching its target customers in the most effective and efficient way possible.
Customer Relationships
Customer relationships refer to the interactions and connections that a business has with its customers. This building block can be shown in the traction/valuation sector of your pitch deck and is critical because it defines how a business will engage with its customers and how it will build customer loyalty. Showing past customer satisfaction and reviews - in the form of testimonials - is a pivotal piece of information to showcase to investors, as it adds credibility to your pitch deck.
The types of customer relationships can vary depending on the nature of the business, the products or services offered, and the customer segments being targeted.
Some businesses may focus on building personal relationships with their customers, such as one-on-one sales or personalised customer service. This approach can be effective for businesses that offer high-end or complex products or services, as it allows them to build trust and establish a strong rapport with their customers.
Other businesses may focus on automated customer relationships, such as online chatbots or self-service portals. This approach can be effective for businesses that offer standardised or low-cost products or services, as it allows them to provide efficient and cost-effective customer service.
In addition to these two extremes, there are many other types of customer relationships that businesses can pursue, such as community-based relationships, co-creation relationships, or transactional relationships. The key is to understand the needs and preferences of different customer segments and to tailor the customer relationship strategy accordingly.
Revenue Streams
Revenue streams refer to the different ways that a company generates revenue from its products or services. This is an essential part of any pitch deck and ultimately what investors want to see! In a nutshell, it shows how the business is monetised and the stages of growth; investors want to see where and how their investments will generate a return. These streams could include selling physical products, providing services, charging subscription fees, earning commissions, or any other method of generating income. Understanding the most effective revenue streams for different customer segments is essential for maximising profitability.
To identify potential revenue streams, companies need to consider their target customers and the value that their products or services provide to those customers. They also need to consider the costs associated with delivering those products or services, as well as any additional revenue streams that may be available. It's helpful to include a breakdown of costs vs profitability in the pitch deck, so it is easier for investors to see at a glance what the percentage ratios are.
For example, a company that sells physical products may generate revenue through direct sales to customers, as well as through online sales channels such as Amazon or eBay. They may also generate revenue through wholesale distribution to retailers or other businesses.
Similarly, a company that provides services may generate revenue through direct sales to customers (D2C), as well as through contracts with other businesses or organisations (B2B). They may also generate revenue through licensing or franchising agreements, or by offering training or consulting services; all of which are vital to incorporate into your pitch deck.
By identifying and diversifying revenue streams, companies can reduce their reliance on any single source of revenue and improve their overall financial stability. They can also increase their revenue potential by tapping into new markets or customer segments, or by offering new products or services that complement their existing offerings.
Key Resources
Resources are a critical component of any business, and they are essential to the success of a company's operations. The resources that a company needs can include people, technology, equipment, facilities, and financial resources and are beneficial to include within your deck.
People are one of the most important resources that a company needs in order to deliver its value proposition and perform its key activities. This includes employees, managers, and other stakeholders who contribute to the company's success. It’s important to mention, and include, team members in your pitch deck; investors will want to see who it is they will potentially be working with. Highlighting any personal accolades and achievements would be helpful.
Technology is another important resource that companies need in order to deliver their value proposition and perform their key activities. This includes hardware, software, and other tools that enable companies to automate processes, improve efficiency, and enhance the customer experience. Mentioning the technology resources that you and your business are familiar with and use, will give investors peace of mind that the job can be carried out sufficiently.
Equipment and facilities are also important resources that companies need in order to deliver their value proposition and perform their key activities. This includes physical assets such as machinery, vehicles, and buildings that are necessary for the company's operations.
Finally, financial resources are critical to the success of any business. This includes funding, investment, and other financial resources that enable companies to invest in their operations, expand their business, and deliver value to their customers. Always show historical figures in the finance section of your pitch deck. Investors will take a hard look at these figures to see your business’s burn rate, profitability and cost of goods (to name a few); so do be prepared. The use of a professional bookkeeper or accountant is advised, to get all your financial paperwork up to date and in order. Another thing to mention is to include, on a separate slide, the use of funds that you are seeking. Give a clear direction of the monetary value needed and how the investment will be spent - a pie chart is typically used to represent this information.
By identifying and leveraging the right mix of resources, companies can ensure that they are well-positioned to deliver value to their customers and achieve their business goals.
Key Activities
Key activities refer to the core activities that a company must perform in order to deliver its value proposition. These activities are essential to the company's success and are typically unique to the company's business model and include a wide range of tasks, such as manufacturing products, providing customer service, developing new technologies, marketing and advertising, managing supply chains, or conducting research and development. In essence, this building block is fundamental in showing investors how your business operates to achieve success. Including your business model, marketing strategy and revenue streams within your pitch deck, gives investors a clear roadmap of your operations.
For example, a company that manufactures physical products will need to have key activities related to the design, production, and distribution of those products. This could include activities such as sourcing raw materials, developing prototypes, testing products, and managing logistics and distribution.
Key Partnerships
Partnerships are a crucial aspect of any business strategy, as they enable a company to leverage the resources and capabilities of other organisations to create a more robust and effective value proposition. These partnerships can include suppliers, distributors, or other companies and are good, but not urgent, to include with your pitch. These key partnerships do show a sense of loyalty and reliability, ensuring that business operations run smoothly.
For example, a company may partner with a supplier to ensure that it has a reliable source of high-quality materials or components.
Similarly, a company may partner with a distributor to reach new markets or expand its customer base.
Cost Structure
The cost structure is a critical aspect of any business strategy model, as it directly impacts a company's profitability and competitiveness. The cost structure refers to the various costs that a company incurs in order to deliver its value proposition and perform its key activities; essentially showing the profit vs loss figures on your pitch deck. These costs can include everything from the cost of raw materials and labour to overhead expenses like rent, utilities, and marketing - all very important numbers that investors will take a look at.
By understanding their cost structure, companies can identify opportunities to reduce costs and improve profitability. For example, a company may look for ways to streamline its supply chain or negotiate better pricing with suppliers to reduce the cost of raw materials. Similarly, a company may invest in automation or other technologies to reduce labour costs and increase efficiency.
It's important to note that the cost structure is closely tied to the value proposition. In some cases, a company may need to incur higher costs in order to deliver a more differentiated or higher-quality value proposition. However, in other cases, a company may be able to reduce costs without compromising the value proposition.
Factoring in the 9-building block of Business Model Canvas into your business pitch deck is a reliable tool for any entrepreneur or business leader.
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