Business plan vs. pitch deck? Which should you be focusing on first as a startup founder?
For decades entrepreneurs and business owners believed they needed to focus on building a comprehensive business plan. All before taking real action. There were good reasons for that. More recently, many entrepreneurs have gone almost exclusively with pitch decks in place of a traditional business plan.
Which of these two approaches is best? Does it depend on the type of business you are starting or if you plan any fundraising efforts? Is a hybrid approach the wisest move? Or should you stay intensely focused on one before the other?
Definitions: Business Plans Vs. Pitch Decks
A traditional business plan is a fairly lengthy text-based document. It lays out all of the parts of the business.
From the corporate structure to marketing plans to startup needs and growth plans and financial forecasts for the next five years. Plus the much longer-term game plan. This is typically in a Microsoft Word style format, and can easily run 25 pages. It begins with a brief executive summary. Which can be 1-3 pages long on its own.
A pitch deck is a slide-based presentation. Think PowerPoint or Google Slides formatting. Ideally, your pitch deck will run between 5 to 20 slides. It is a very short, simple and compact version of a traditional business plan. Pitch decks emerged specifically for pitching startups to potential investors for fundraising. However, they are increasingly replacing business plans.
If you want to go more in detail you can view the video below where I cover this.
Uses For A Business Plan Today
Are business plans still relevant today?
Yes and no. Every business and entrepreneur should have a plan. We all know what failing to plan means. Yet, what is effective and valuable in terms of business plans may be changing and evolving.
A business plan really helps you get depth and length in your plans. It gives more clarity than you could ever fit into a pitch deck. This process helps entrepreneurs really think through the details and big vision and long term game plan. It helps you get granular with marketing plans, startup costs, cash flow needs, and financial projections.
It also helps to give you a framework to start building on. As well as really thinking through a functional business model.
Investors, advisors and other key players may be completely satisfied with seeing a one-page business plan, executive summary, and bullet-pointed action plan. Providing that accompanies a great pitch deck.
However, there may still be some scenarios in which you will be asked for your business plan. This includes applying for some types of loans, leasing space and joining certain groups or applying for licenses.
The Pros & Cons Of Business Plans Today
The advantages of business plans:
- Being forced to think through the details
- Having an in-depth plan and awareness of your real needs
- Being able to back up the hype with something tangible
- Credibility with potential partners and early investors
- Being prepared if you are asked for it
- Having a comprehensive guide and roadmap to follow
The cons of business plans:
- Chances are no one else will ever read it
- Things move so fast, most may be irrelevant in a couple of months
- It’s a black hole for your time, energy and momentum
- Many entrepreneurs get bogged down here and miss their best opportunities
- Additional expenses with negligible returns
- Appearing like a novice to experienced investors
Uses For A Pitch Deck Today
A pitch deck is for more than just fundraising. Below is a video where I cover how to create a pitch deck.
See How I Can Help You With Your Fundraising Efforts
- Fundraising Process : get guidance from A to Z.
- Materials : our team creates epic pitch decks and financial models
- Investor Access : connect with the right investors for your business and close them