This question has come up a lot. Not that people don’t get there is a difference- clearly these are two different things… right?
But what is the difference and what purpose does each one serve? Do you need both?
In this post, I’ll try and resolve the questions that most often come up around these two related but overlapping documents so critical to new startups success.
Definitions- Pitch Deck vs Business Plan
Let’s start with definitions, always a good way to get going:
A Pitch Deck is: a set of slides used to present a business concept, usually to secure funding from investors.
A Business Plan is: a written document outlining the details of a business launch or expansion with supporting information meant to provide a pathway to achieving the goal and addressing potential issues that will impact that result. A business plan also typically includes detailed financial projections for the business.
So for starters, a pitch deck is meant to be presented and a business plan is meant to be read. A pitch deck, looked at on it’s own, may seem incomplete or unable to address the questions that will arise from reviewing it, but that’s OK as those are things the presenation should cover.
On the other hand, a business plan should be comprehensive and anticipate all the objections and issues a reader may have and attempt to answer those in the narrative. A business plan should cite its sources for claims and be as thorough as possible in all aspects it covers.
When Do You Use Each One?
A pitch deck is used when you are meeting with investors, either in person (preferably) or over a video presentation. They may have read your business plan already, but assume and present like they haven’t. The expectation is that you quickly get to your point, make your most compelling arguments here and stick to the high level facts and figures.
A business plan is provided either to generate enough interest to get a meeting or after a meeting is held and the investors want to “dig in” further on what they perceive to be worth further consideration.
You can sometimes get away with only an executive summary, which is the first section of the business plan that essentially serves as a written version of the pitch deck and gives the highlights of the business to get things going. Even if you provide a complete business plan, very often the only part that gets read, at least at first, is the executive summary.
What Are Other Differences?
Probably easiest to just do a list for each:
A pitch deck:
- Tells a Story
- Builds Excitement
- Would be a very incomplete business plan if just converted to text
- Can be presented in as little as 10 minutes or as long as an hour
- Is visually appealing
- The slides add to the presentation- they don’t duplicate it
- Highlights the best parts of each element of the business
- Ends with a specific “ask” – usually a funding goal
A business plan:
- Goes into depth on each section of the plan
- Would make a terrible pitch deck if copied completely
- Names its sources and provides references for its claims
- Tries to anticipate and address questions and objections
- Adds visual aids where possible and logical
- Includes in depth financial projections
- Must start with a very engaging executive summary
- Has to be able to stand alone without further explanation or supporting conversation
If you have an amazing track record or team, or have already had several rounds of funding, you may be able to get away with just a pitch deck and skip the business plan for the round you are pitching.
If you are new, you absolutely need both elements.