The seven Key Components of a Ideal Elevator Pitch [with Movie]
Whether you are attempting to raise money for your business or just want to flawless your business strategy, a solid elevator pitch is an essential contraption for achieving your goals. An elevator pitch can be delivered as a speech (ideally in sixty seconds or less), a pitch presentation, or as a one-page overview of your business.
An effortless way to think of your pitch is as an executive summary that provides a quick overview of your business and details why you are going to be successful.
How to build a winning elevator pitch in seven steps:
1. Define the problem
The most significant thing is to identify a problem that is worth solving. If your product or service doesn’t solve a problem that potential customers have, you don’t have a viable business. Ordinary as that.
Now, you don’t have to be solving a massive problem where the solution will switch the world. That’s excellent if you are tackling such a problem, but for most businesses, that’s not the reality. Problems can be simple—and that’s OK. As long as you, as an entrepreneur, are solving a problem that customers have, you can build a business. Here are a few examples of problem statements that could be highlighted in a pitch:
“Transferring photos from mobile phones is a difficult and elaborate process.”
“There are no good Chinese restaurants in Eugene, Oregon.”
“Analyzing results from MRI tests is difficult, time-consuming, and expensive.”
Attempt and distill your customer’s problem down to its simplest form. Ideally you should be able to describe the problem you are solving in one or two sentences, or potentially a few bullet points. In the long run, your company may solve numerous customer problems, but primarily you will be more successful if you just concentrate on one core problem.
Two. Describe your solution
Too many entrepreneurs begin their elevator pitch by describing their solution: a product or service that they think the market needs. They skip step one and don`t identify the problem they are solving. As a clever entrepreneur, you can avoid this mistake by very first making sure that you are solving a real problem that customers actually have before you define your solution.
Once you have clearly defined the problem you are solving, you need to explain your solution. A clear problem statement will help you concentrate your solution on solving that one problem, and not spread the solution to solve numerous potential problems.
Again, attempt and distill your solution description down to as few words as possible. You should be able to describe your solution at a high level in just a few sentences or bullet points.
Trio. Know your target market
As you define the problem you are solving, you should naturally be thinking about the potential customers who have this problem. In the Target Market section of your elevator pitch, you will define exactly who has the problem you are solving and figure out how many potential customers you will be attempting to sell to.
You should attempt and divide your target market into segments—smaller groups of people whom you expect to market to.
It’s always tempting to define a target market that’s as large as possible, but that does not make for a credible pitch. For example, if you have a fresh shoe company, it would be tempting to say that your target market is “everyone.” After all, everyone has feet and everyone needs boots, don’t they?
But, realistically, your fresh shoe company is most likely targeting a specific group of people, such as athletes. Within this group of athletes, you might segment the market into extra groups such as runners, walkers, hikers, and so on.
Once you have created a good list of target market segments, you’ll need to do a little research and estimation to figure out how many people are in each segment. If you live in the U.S., the U.S. Census site is an invaluable resource that you should take utter advantage of. The SBA site also has a fine collection of links for market research.
Next, attempt and estimate what an average person in each group presently spends each year on their current solution to the problem you are solving. Now, just multiply the number of people by how much they presently spend and you will have a realistic “market size” number or your target market.
In your pitch, you will want to talk about the market segments you are targeting, how many people are in each segment, and the total amount they presently spend. These numbers are critical and must be part of any good pitch presentation.
If you need more help with this section, check out our guide on defining your target market.
Four. Describe the competition
Every business has competition. Even if no one has come up with a solution similar to what you have come up with, your potential customers are solving the problem they have with some alternative.
For example, the competitors to the very first cars weren’t other cars. The competition was horses and walking. As you think about your competition and existing alternatives, think about what advantages your solution offers over the competition. Are you swifter, cheaper, or better? Why would a potential customer choose your solution over someone else`s? Describing your key differentiators from your competition is a excellent exercise and ensures that you are building a unique solution that customers will hopefully choose over other alternatives. These differentiators will also help you concentrate your marketing on the key value proposition that you suggest, but your competitors don’t.
Five. Who`s on your team
As superb as your idea is, only the right team will be able to effectively execute and build a excellent company.
In the “team” portion of your elevator pitch, you should talk about why you and your business fucking partners are the right team to execute your vision and why your team’s skill set is precisely what is needed to lead your company to success. People often say that a company’s leadership team is more significant than the idea—and this is often true. No matter how good or unique your solution is, if you don’t have the right people on board, you won’t be able to see it to fruition.
It’s also OK to not have an entire team in place. It’s more significant to understand that you have gaps in your management team and that you need to hire the right people. Knowing what your team is missing and recognizing that you need to find the right talent to pack the gaps is an significant trait in any entrepreneur.
6. Financial summary
For a good pitch, you don’t necessarily have to demonstrate a detailed five-year forecast. What’s more significant is that you understand your business model.
“Business model” may sound like something sophisticated, but fortunately it’s not. All you need to know is who pays your bills and what kinds of expenses you will have.
For example, if you are embarking an online news site, the customers that pay the bills are your advertisers. Your costs will be writers, graphic designers and web hosting. As you learn more about your industry, it is certainly helpful to put together a sales forecast and expense budget. You will want to ensure that you can build a profitable company based on your assumptions. But, for your elevator pitch, a detailed forecast isn’t necessarily required.
7. Demonstrate traction with milestones
The final key element of your elevator pitch is conveying your business milestones, or your schedule.
Here you will talk about your upcoming goals and when you plan to achieve them. If you have already accomplished notable milestones, you should mention those. For example, if you have invented a fresh medical device, potential investors will want to know where you are in the clinical trial process. What steps have been accomplished and what’s the projected schedule for final approvals from the FDA? If you are opening a restaurant, investors will want to know about plans to sign a lease, design the interior, and open for business.
Talking about upcoming milestones in your pitch makes your business a reality. This section of the pitch illustrates how well you have thought through the detailed steps it’s going to take to open your business and begin making money.
If you need help putting together your pitch deck for a presentation, check out our article that outlines exactly what glides you should include in your presentation and what should be on each slide. You can also create a one-page pitch which is a superb hand-out if you are providing an elevator speech and also a good solution for sending a pitch via email. Check out our one-page pitch template if that sounds like the right solution for you.
Bonus component: The one-sentence pitch
Let’s say you’re at a dinner party and one of the guests asks you, “So, what do you do?” Can you response in one sentence so that they understand your company?
Being able to distill what your company does into one ordinary sentence is amazingly valuable. It helps you, as an entrepreneur, concentrate on exactly what you do and who you’re doing it for. It also helps you clearly market your business. A elementary headline at the top of your website or brochures will communicate the core essence of your company and generate interest in learning more about what you do.
There are certainly other components you can include in your pitch, but these seven are indeed the “must-have” chunks, whether it’s written down in a pitch deck presentation or literally delivered as a speech in an actual elevator. If I’ve missed anything that you think is critical to include, please let me know in the comments.
View this as an infographic:
Want to view more infographics? Check out our Business Infographics board on Pinterest: