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What Business Expenses to List in A Pitch Deck


What business expenses should you show in your startup’s pitch deck?

Expenses just come hand in hand with starting and operating a business. In fact, in recent years even the largest, most funded, and even public companies with billions of dollars in revenues appear to have more expenses than revenues coming in.

Fundraising is about pitching value and positive returns to potential investors, but it is also about raising the funds to spend as well. So, how do you show your expenses in a pitch deck? Where in the pitch deck do they belong, and which are the most common uses of funds?

Common Startup Business Expenses

As a new startup entrepreneur you may even still be figuring out all of your expenses yourself.

In addition to investments in helping your venture take big leaps forward as it grows, there are your initial startup expenses, and then ongoing operating expenses. Let’s take a look at some of the major categories which you can expect to be spending in. Include these common startup expenses in your pitch deck:

Legal Expenses: There may be a lot more legal expenses involved in starting up than some entrepreneurs expect. There can be ways to start off cheap and DIY some documents, especially if you have a law background.

Though the costs of forgoing professional help can really cost you a whole lot more later on. This can include items like incorporating your company, drafting your initial operating agreements, and various contracts.

As we’ll dig into more in a moment, there may be significant legal costs in fundraising as well. Not only reviewing, negotiating, and drafting investment agreements, but in filing with the SEC to raise certain types of funding. Which alone can cost six figures in some cases.

Business Licenses: Not all businesses may require licenses. It will depend on where you are physically located and do business. As well as the type of business you are in. A local business license may cost you as little as $100, whereas a cannabis license may cost you $100,000, or far more. Each state and jurisdiction that you do business in may also require a separate license. Applying for licenses, and there are other requirements which may cost quite a bit of additional capital beyond this as well.

Fundraising: While you may be going out fundraising to bring money in, that doesn’t it won’t cost. In fact, considering that founders can spend 50% of their time working on fundraising, not even counting their team’s labor on creating various fundraising materials , it can be a significant expense. You should be committing a certain percentage of the total funding goal to your efforts, depending on the form of fundraising you are embarking on.

Equipment & Devices: Even a lean startup or solo entrepreneur will need devices to operate and communicate. This may be as simple as a laptop and backup, along with your current mobile phone. Or it could be far more complex and technical. This will be vastly higher if you need custom tools, heavy equipment, or are in healthcare.

Advisors & Consultants: There is so much to learn as a new entrepreneur, or when entering a new industry. Advisors and consultants can help you hack years of knowledge, give you the benefit of seeing much more of your industry, business, and fundraising landscape, and make vital introductions, as well as helping with essential elements, such as developing marketing plans. Some may be paid on an hourly or project basis. Others may be willing to work at least partly based on performance, or in exchange for some equity in your company.

Ongoing Costs

Business expenses don’t end once you have set up your operations and have organized your company. There are a variety of ongoing costs of doing business. These are some of the most basic.

Hosting: Few companies try to get away without a website or some form of online store today. Even if you only have a simple landing page as an online business card, you are going to have continuous hosting expenses. This can range from a few dollars a month, to hundreds, or more, depending on your needs.

In addition to your website, you may also be hosting other files and data online, and be using collaborative online workspaces for your team, including for your fundraising efforts.

Salaries: Sooner or later you are going to have to pay employees. Even yourself. There are ways to minimize labor costs for some early stage startups, such as providing stock options and equity as partial compensation, and using on-demand remote team members. Still, experienced entrepreneurs know that the sooner they can bring in professional executive management, the better.

As you grow your startup, your staffing needs will grow as well, which may include benefits, perks, bonuses, organizing team off sites, and retirement plans.

Software: Subscription software has exploded in popularity over the past decade, as has subscription everything. Each subscription, no matter how small, is a part of your overhead and ongoing expenses. This can quickly escalate into being a lot more than you anticipated. Be selective about the software you adopt. Promptly cut off subscriptions you no longer use. Look for options that integrate well with everything else you are using that will scale with you.

Insurance: Don’t forget to budget for insurance. In fact, you may need a variety of forms of insurance. There may be those specific to your industry and business licensing, as well as those related to specific activities your startup engages in.

If you have retail spaces or delivery, or other transportation needs, these may all need special coverage. Then you have insurance needs for your team members, and your cofounders and executives as ‘key person’ insurance.

It is also wise to have business insurance to cover gaps in income due to natural disasters, or events like COVID lockdowns. Make sure you are budgeting for inflation in these expenses as well.

Marketing: If you aren’t marketing, you are making sales. If you aren’t gaining new customers and making sales, you have no revenues, and in turn, no profits.

You might get away with some guerilla marketing in the early days, but every serious business needs a serious marketing budget that is constantly increasing to keep up with inflation, competition, and to keep growing the company.

There will also be significant investment required for marketing around your fundraising campaigns, both indirectly to raise awareness and boost the credibility of your company, as well as investor outreach and follow up. This may be one of your largest expense categories.

Taxes: Taxes are likely to be the largest portion of your expenses. There can be federal, state, and local taxes. Each jurisdiction you operate in will have its own taxes, and tax rates. If you overlook budgeting for taxes, you will certainly be in the red.

As a business owner you also need to consider double taxation, and your own personal taxes, after you’ve taken care of your corporate taxes.

Where to Show Your Expenses in A Pitch Deck

Where do these expenses show up in a pitch deck? Which of them belong in your pitch deck?

Current & Historical Financials: If your company has any operating history, then you should have a financial slide showing your performance for at least for the past couple of years. As with your entire pitch deck, simplicity is key. Unless you are a later stage startup, with multiple products or business lines, then one slide with a simple spreadsheet showing the major financial categories should be sufficient. Sales volume, revenues, gross income, total expenses, and gross profit as the most important.

Given that investors, on average, typically allocate less than three minutes to review a pitch deck, you don’t want them bogged down on this one slide the whole time. Leave time to get to your call to action, and be able to take action.

If you have more complex financials you can host them in your online data room for serious investors who are ready to begin their due diligence.

Financial Forecasts: Whether you are a brand new startup concept or a mature company, your financial forecasts are a key component of your pitch deck, and pivotal in your fundraising efforts. No matter what stage you are at, you will need this slide, which is also where your expenses will be shown.

Customer acquisition count, revenue growth, and strong profit margins are all vital for investors. You want to show off these things, but investors want to see your expenses as well. The amount of expenses you present will say a lot about you and your venture. It shows if you are being honest and realistic, if you are managing your money well, or if there is room for great improvement, which is an area the investors may be able to bring value to.

Atlanta Ventures’ blog recommends that early stage, pre-revenue startups focus on showing their Customer Acquisition Costs (CAC), and how much it costs to serve those customers well. Again, don’t bog investors down in too much detail or too many line items at this point. Display the basic categories. Provide more detail in your data room for those willing to give you term sheets.

Be prepared to answer common expense related questions, such as how much it costs to build each prototype, in the Q&A portion of any live pitches or investor meetings.

Business Model Slide: If your expenses are a unique part of your business model, then you may highlight a part of this here.

Competitive Advantage: Following on from the above, if you are able to operate and make or deliver products far cheaper than your competition, and can price far cheaper (profitably, and sustainably), then this may also be featured on your competitive advantage slide. As well as being one of the ways you differentiate yourself on your competition slide.

Common Uses of Funds When Fundraising For A Startup

You are fundraising because you have expenses, or need to expend more cash to invest in growing your company. Your pitch deck should include these main categories that investors expect to see among your use of funds slide.

  • Hiring
  • Salaries
  • Marketing
  • Acquisitions
  • Expansion

Expenses are a part of starting up and continuing to operate any business venture. It requires more spending and capital investment to grow and expand as well. While investors want to know your expenses, which can be very revealing, they should not be a major part of your initial pitch deck. Save the details for your data room. Know your numbers, but focus more on returns and what you are going to do with the invested capital than how much you’ve been burning.

Alejandro Cremades is a contributor to Grit Daily News, a serial entrepreneur and the author of The Art of Startup Fundraising. With a foreword by ‘Shark Tank’ star, Barbara Corcoran and published by John Wiley & Sons, the book was named one of the best books for entrepreneurs. The book offers a step-by-step guide to today’s way of raising money for entrepreneurs.



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