Amazingly only 58% of successful pitches have a slide on Financials. Why? Because if you haven’t sold anything yet, it’s all guess work and everyone knows it!
What is key to the financials page is demonstrating that you have a real handle on how the business is running. Imagine sitting on a desert island and you could only get three numbers each week to give you feedback on how your company is doing. What numbers would they be? This is a good starting point for investors.
Each metric you use will have some connection to the goal of the business: the ability to pay all its debts and have some left over for investment into the future.
You might select some of the following:
- Gross and/or Net Profit – absolute values and changes over time.
- Conversion Rate – from first contact, to payment and to recommendations that turn to sales.
- Size of pipeline from first contact through to sales.
- Customer Acquisition Cost.
- Life Time Value of a Customer.
- Viral Rate.
Watch out for “Vanity metrics” such as Turnover, Page views, facebook followers, etc. With vanity metric there is little or no connection with the ability of the company to pay its debts.
Every business is different, and the key metrics will depend upon your Business Model.
Which metrics are you going choose?