The terms "business plan" and "business proposal" might sound similar, but they cover very different…
Most Startup entrepreneurs or founders in the business ecosystem usually ponder the difference between a Business Plan and a Pitch Deck. They tend to frequently ask questions like, which one between a business plan and a pitch deck is more important? Are business plans becoming extinct? Is a pitch deck a modern/trendier version of a business plan? Which one works best for startup businesses? Does an entrepreneur need to have either one or both of them? And at what time is each one used? These questions are all valid. However, the truth is that you need both a business plan and a pitch deck at different intervals and for slightly different reasons. To buttress this point further, here are some basic information about business plans and pitch decks that will help you in your entrepreneurial journey:
What is a business plan?
Simply put, a business plan is a written document that explains everything about your business. It provides a detailed description/overview of your business objectives and how you plan to achieve them. At its core, a business plan should be a practical document that helps you determine if your business idea is viable and will be profitable. A good business plan can be used as a benchmark to measure your chances of starting, sustaining, and scaling your business successfully. Moreover, a good business plan should serve you as a guide or roadmap for operating your business daily and navigating the associated challenges. What makes a business plan detailed and comprehensive is the fact that it covers all the critical areas of your business like your business definition, mission, product(s) or service(s), industry analysis, target market, competitive advantage, marketing & sales strategies, operational plan, management team, human resource needs, organizational structure, startup or expansion funding requirements, financial projections, return on investment, etc. It is also a great tool to attract investors and additional investments if you so desire. A business plan can have anywhere from 10 to 100 pages, based on the size and scope of your business idea.
What is a pitch deck?
A pitch deck is a deck of slides that visually summarizes vital elements of the business plan. It is mainly a visual aid used to communicate or sell your business idea to potential investors. Usually, a pitch deck is not overly wordy or too detailed. Its core focus is to score a meeting with potential investors and then provide them with your fully developed business plan. So in a sense, the pitch deck is more of an introduction and a presentation for the business plan. Also, a pitch deck can be used as a visual aid or story board to present or pitch your business idea to the judges and guests of a pitching competition. A good pitch deck should contain key visual slides like the title slide, company overview slide, problem or opportunity slide, solution slide, business model slide, target audience slide, go-to market, traction slide, competitive advantage slide, financial slide, investment request slide, team slide, and closing Slide. It usually has at least 10-20 slides based on the purpose of presenting your business idea.
A Business Plan or a Pitch Deck? Here is my final take on this subject. Pitch Decks can be considered teasers or appetizers presented to draw the attention of potential investors for further engagements and communications concerning your business idea. On the other hand, Business Plans are the main course meals that convey detailed information and description of your business idea – either for your personal consideration/consumption or to attract the attention of potential investors. In any case, it is somewhat equally significant to have both a business plan and pitch deck developed for the ultimate sustainability and success of your business venture.