Convincing investors to put money into your business involves demonstrating to them that doing so offers the potential for significant returns. Investors want to know that the risk they take will be offset by a high enough return to make it worthwhile. So to convince them, you have to show them a solid business model.

As an entrepreneur, you might have only one shot at a given group of investors. How do you make the most of that opportunity? By focusing on the same topics that their own due diligence will cover. One of them is your business model.

In a nutshell, here’s how to pitch your business model effectively:

Demonstrate Your Business Case

First, demonstrate a valid reason for your company to exist. Another way to phrase it is to demonstrate your business case. Investors want to know what you offer that customers cannot get anywhere else. Perhaps you’re pitching a product for an underserved market. Maybe you are pitching a fairly common service offered in a way that is unique to your company. Either way, an inability to demonstrate your business case could doom your pitch from the start.

Define How You Will Sell

Defining your business case is followed by explaining how you intend to get your products or services to your customers. In short, how will you sell? Investors want to know that you have a workable plan in place. They do not want to see you sitting on your hands just waiting for customers to come to you. If you don’t know how to get customers, figure that out before you pitch to investors.

Define the Added Value

You may succeed in selling products or services in the early stages based purely on sound marketing. But if you want first-time customers to become return customers, your products or services have to add value to their lives. Be prepared to define that value to investors. They need to know that you are offering something with a perpetual market. Otherwise, they will not see future potential. All they will see is endless funding slipping through the cracks.

Demonstrate Revenue Earning Potential

This next point is a big one, according to Mezy. Utah-based Mezy is a company that provides due diligence-as-a-service. They say investors want to see a company’s ability to generate revenue. Moreover, they want to see a plan for increasing recurring revenue.

Without revenue there is no profitability. Without profitability there is no return on investment. So if nothing else, you need to have a plan to generate revenue for as long as your company stays in business.

Along with revenue are margins. If you can quantify expected margins in a best-case scenario, you can help investors better see the need to investing in the opportunity you offer. Margins are not necessarily as important as recurring revenues during the pitch phase, but they certainly don’t hurt either.

Offer an Exit Strategy

This final point is one that a lot of entrepreneurs overlook. If you can offer a reasonable exit strategy at the time you pitch your business model, you will be communicating to investors that you do not expect them to act as a perpetual financial lifeline. They will perceive this as being smart. Offering a reasonable exit strategy can mean the difference between securing an investment and losing it.

Pitching a business to investors is all about convincing them of your ability to generate returns. As such, a big part of any pitch is the business model. Offer a sound model based on solid data and you will have an investor’s attention.