What is an Elevator Pitch?
An elevator pitch is a brief, 60 seconds or less, persuasive speech that you use to spark interest in what your business does. Business owners can use an elevator speech to quickly explain what their business does, who their customers and competitors are and to explain their goals and objectives. For example, a new business owner runs into an old client and they begin to chat. The old client asks about the business owner’s new company and he stumbles because there is too much to say and he hasn’t organized how he’s going to explain what his company does yet. Had the business owner crafted a short elevator speech summarizing his startup, he may have gained a new client. When developing your elevator pitch you should imagine someone is asking, “what do you do?”. In short, to effectively answer the question in 30 seconds or less, answer with these three components: who, what and why:
- Who is your business and who are your competitors?
- What industry are you in and what is your target market?
- Why is your business better than the competition?
You should also have a one sentence answer to the who, what, why question prepared in case it’s a super short conversation. If you have more than 30 seconds and want to go more in depth, checkout these components entrepreneurs can use to perfect their elevator pitch:
Tips to Perfecting Your Elevator Speech
Tell Your Story, Don’t Sell It
Often times, people get turned off by salespeople trying to immediately sell them something they don’t think they need. Don’t try to sell your product or service during your elevator speech, tell a story that draws the listener in and makes them want to know more. You’re not trying to close any deals with your elevator speech, the purpose is to inform the listener and keep them coming back for more.
Know Your Audience
You can’t always be sure exactly who you’ll be speaking to, but it’s helpful for entrepreneurs to gauge their listeners and tailor the speech to specific audiences. Think about the different types of people you may encounter and what industries they will be from and create your speeches accordingly. Interact with the person when giving your pitch to keep them engaged and listening.
Layout the Problem and the Solution
Grab your audience’s attention by starting off with the problem that your product or service will solve and layout the solution you provide. Be sure not to start off with the solution as that is a mistake a lot of entrepreneurs make. Avoid this mistake by making sure your product solves a reoccurring problem that your customers are often faced with.
Define Your Target Market
Talk briefly about who your customers are. This is where you’ll describe who has the problem you’re solving. Include gender, age, location, hobbies, how much money they spend, etc. in this portion of the pitch. Maybe you are targeting more than one market segment. If so, talk about the different segments and the reasons why you chose them.
Define Your Competition
When preparing an elevator pitch, as a business owner, you should briefly define your competition and how your business is different from competitors. Potential clients are curious as to how the owner of a company works to position their business in comparison to competitors. Why is your solution to the problem different? This may be an easy explanation for some companies but more difficult for others. Do research to effectively answer this question. Every business has some sort of competition, whether it’s direct or indirect competition.
Paint Your Financial Picture
If you’re applying for funding, you’ll need an elevator pitch. Talk about your financial business model and how you are following the process. Estimate your startup costs, mention what kind of expenses you have and how you pay them. As you begin to gain more experience as a business owner, you’ll be able to go into more depth about your finances without any hesitation or question of what to say.
For the final portion of your elevator pitch, briefly discuss your company’s milestones, whether they have already been accomplished or are future goals. If your discussing something that was already accomplished, talk about how you got there and where you are currently in the process. If you’re mentioning future goals, discuss why you have the goal and how you plan to reach it.
Preparing an elevator speech is a must when creating a new business. It’s a great way to reach potential new clients in a short time frame. Business owners use elevator pitches to lead to deeper conversations and to inform prospects (and potential funding sources) about their business. When first coming up with an elevator speech, write it out on note cards to practice and memorize it and run it by family and friends and get their feedback. Don’t forget to be natural! Try not to seem overly rehearsed when giving your elevator speech, remember, you know your business best! All business owners should have a short elevator pitch prepared, should they need it.