Giving a persuasive pitch is an essential part of owning a business. Whether you're seeking investors, marketing for new customers, or applying for a loan, you'll have to master your technique to hit many major milestones.
Pitch competitions can be a great way to hone your skills — and maybe win some funding while you're at it. Winnings typically go from $5,000 to $200,000, depending on the competition.
But if the company or investing firm hosting the competition is going to give out that much cash, oftentimes without requiring equity, the judges need to be certain the winning business will see significant growth.
Ginger Siegel was one of the judges at Mastercard and Bank of America's Grow Your Biz pitch competition. She's the North America small business lead at Mastercard and a frequent panelist at business competitions and events. She has a few go-to questions for entrepreneurs, and their answers signify to her whether they are truly ready to grow their businesses.
Siegel told Business Insider that an entrepreneur needs to show they've thought through everything from beginning to end. "Something that starts as just a good idea is never enough," she said.
Here are the five major questions Siegel asks entrepreneurs and her tips for how you can impress judges and investors.
Revenue: Do you know your business?
Pitch-competition judges are going ask about your numbers, so be prepared to give your annual revenue, how much capital you started with, the return on investment on any capital put into the business so far, the cost of operations, and customer-acquisition costs — just to name a few points.
"A lot of new business owners really don't focus on the financial pieces," Siegel said. She added that it didn't matter which type of business you own, whether you're baking cookies or consulting, you have to know your financials for a panel to believe you'll put the money to good use.
Even a hesitation or uncertain ballpark answer can be a red flag that you don't know your business as well as you should.
Risk assessment: What could go wrong?
Deidre Mathis won the Grow Your Biz grand prize, making it her 12th pitch-competition victory in two years. She owns and operates Wanderstay, a hostel in Houston that offers shared dorms and private rooms for $35 to $60 per night.
After Mathis' pitch, Siegel asked her how she manages the security risk of guests coming in and out of her hostel. Mathis promptly explained the security system she installed, which gives each guest a unique PIN to enter the front gate and building.
Siegel said business owners have to do a risk assessment and think about all threats. "One bad issue can take a company down," she said.
Oftentimes, this means a business has insurance coverage and implements safety protocol. For a food or health company, panelists would want to ensure the business has met all necessary certifications and compliance.
"Hope is not a strategy. You want to be ready and have a plan," Siegel said.
Scalability: What's next?
Successful business owners know that a business concept is only as good as its execution. Neither panelists nor investors will consider a business if it doesn't show promising scalability. For example, if a snack company lands its first grocery-store placement, the owner needs to ensure they can keep up with a rapid increase in orders.
"So it's great to have an idea, but then how are you going to scale it to the point where it's a real business?" Siegel said.
This requires thinking ahead to the best-case scenarios. "I think it's really important that they think through, 'What if I'm not successful, but what if I am?'" she said.
Consistency: Can you maintain your brand?
As a business scales, the owner risks losing the brand they worked so hard to build. Scaling can mean hiring more employees, opening more locations, or taking on more inventory, which results in having more to manage and keep consistent.
"What do you do if you're not the person doing it anymore?" Siegel said. She uses McDonald's as an example of a company that has maintained a consistent brand, despite having thousands of locations across the globe. "You could be in China and order a McDonald's hamburger, and it's going to taste the same as a McDonald's in New York," she said.
Losing your brand could then jeopardize your customer base. "No matter what it is, people want to know that their experience is going to be good and consistent," Siegel said.
Sustainability: Will it last?
Siegel also considers a business owner's plan and vision for the money they're vying for. To her, it's important they not only use the money but also are able to continue raising money in the future.
"Many businesses go out of business in the first couple years because they don't have a sustainable ability to raise money and raise capital," Siegel said. She looks for entrepreneurs who believe in themselves and can stand out to venture capitalists.
Leadership: Do you have an 'executive presence'?
Presentation can make up just as much of a pitch as knowledge. Judges will pay attention to your gestures and demeanor. "It's only maybe 50% what you say and 50% how you say it," Siegel said.
She looks for "executive presence," or confidence in the way an entrepreneur makes eye contact, answers quickly, and carries themselves — even through the nerves. "It's how you exude on the outside," she said.
A business pitch is often the first, if not only, impression an entrepreneur gets to show their leadership capability. "How people present is very often indicative of how they lead," Siegel said.
And that confidence she looks for can make or break more than a pitch. "True leaders don't tell people to follow. True leaders make people want to follow them," Siegel said.