…we have this idea…
The elevator pitch is a few sentences designed to explain (in the time it takes an elevator to get to the top floor) what your business does. It is not a sales pitch for a product, it is a description of a customer problem and how you can solve it.
The elevator pitch gives the investor a framework for the rest of the business plan, encourages them to read on giving you a chance to tell the rest of the story, and hopefully leads to a meeting.
Any investor presented with the elevator pitch should be able to understand the business idea, if they don’t get it, they will probably think your customers won’t understand it either. If you can’t explain your idea in a few sentences it usually means you need to take a step back and clarify in your own mind what it is your business is offering.
The ideal elevator pitch needs to deal with and answer the following questions:
- What customer problem are you solving?
- What’s your solution to the problem?
- What’s your product?
- Who is the target market?
The elevator pitch sets the framework for the rest of the business plan. Although it should be possible to draft an initial version before completing the business plan, it is important to review the elevator pitch following completion, to ensure that they are consistent with each other.
This is part of the financial projections and Contents of a Business Plan Guide a series of posts on what each section of a simple business plan should include. The next post in this series is the management team.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.