So, why are these documents so important? The majority of businesses are formed by founders that believe that they have found some form of niche in the market for their product or service. This may be because it is different to what is already available, or that it is delivered in a different way. It may even be just the quality or price point that you believe will enable you to take on the existing competition.

Before starting a new business, or even launching a new product or service, it is of course fundamental to ensure that there is indeed a market for what you intend to sell. In order to do that it is necessary to conduct considerable in-depth research, market studies, competition analysis, and produce a minimum viable product. But it is also necessary to consider supply chains, sourcing of materials, manufacturing, service delivery, staffing requirements, and every other aspect to fully understand what needs to be done and how to do it. Without going through these steps no business will be best placed to succeed.

All the research should then be put together into a business plan. This only needs to be a simple 20 page word document but it should set out all the research, assumptions, financial forecasts, and other information necessary, and set it out in a logical and informative way. A great tool to help with the initial thinking is by using a business model canvas, of which there are many templates online.

The business plan should set out the finer detail of your research so that any external reader will have most of the information that may be required in order to understand your business and your aspirations. The business plan then, is done first and foremost for you to fully understand all the challenges that might be faced, but possibly also to share with others.

The pitch deck is a much more simple document and would typically consist of 15 to 18 slides. These would summarize the business, running through the problems it sets out to address, how it will address them, what differentiates the business from others, the potential market, the team and advisory board, financial forecasts, and assuming that it is to be sent to a potential investor then it would also include how much is being raised and what the money will be spent on.

Think of the pitch deck as a trailer for an upcoming blockbuster movie. It needs to grab the reader’s attention and make them want to know more about you and the business. The slides should have pictures and graphics, and not be too wordy. Many potential investors will only flick through a pitch deck and spend around three seconds a slide! Make them slow down and take more notice. Too many words take too long to read and for the reader to take the information in.

If you are seeking to raise finance, then you will definitely need these documents, as not only will potential investors want to see them but even to apply for SEIS/EIS advanced assurance they will be required (more on this topic in future weeks).

A good, attention-grabbing pitch deck summarizing your business, together with a more detailed business plan are necessary then, not only to raise external funding but, perhaps even more importantly, they are needed for founders to ensure they have the best chance of success.