In the real world, you know your so-called elevator speech and you use it when appropriate. Every time you do it, you and it get better. I’d recommend taking time out and working on it, but you probably won’t; you’re too busy. Think about it in the shower. Think about it when you’re stuck in traffic, or waiting in line. Rehearse it in your head.

That said, I’d like to focus in this post on elevator speeches as delivered by MBA students in venture competitions. I’ve seen a bunch of these, probably more than 100, but who’s counting. They’re fun to watch, and I’d think fun to compete in. But some students take them as torture.

The last one I watched had 20 competitors and a large clock, about six feet high, ticking off 60 seconds. Each 60 second speech ended with a very loud buzzer. No going overtime with that buzzer there.

Of the 20 competitors, three failed to get all the way through. They choked up, got caught on some phrase, panicked, and crashed. They stepped off the small podium with half the clock’s minute, and most of their memorized speech, left unspoken.

The moral: please don’t memorize your elevator speech. Not ever. It just doesn’t work. It’s at least 10 and maybe 100 times harder than knowing it thoroughly and rehearsing it well without ever trying to get the exact same words twice. You need to make points, not memorize a speech. Know your points, and their order.

You’re supposed to know your business and enjoy a minute to talk about it. Real businesses do.

Interesting moment: after the embarrassing failures in that last contest I watched, the moderator got up and asked if anybody else would like to try. His point was empathy, wow, it’s hard to make an elevator speech. But he didn’t make his point very well: there wasn’t a non-contestant entrepreneur in the room who wouldn’t have loved to have 60 seconds at the microphone with that audience. If you don’t like to talk about your business, find another business.

But you’re in a contest, you know this is coming, so practice. Use your computer and record, over and over, and listen.

Don’t rush.  Believe it or not, 60 seconds is plenty of time to describe that person with a situation, your unique abilities to come to the rescue, what your solution is, and what you want from your listener. Pause in between each of the four main points, breathe, and emphasize. Look at your listener.

You do have to make eye contact, but you don’t necessarily smile. Describing somebody with a problem isn’t always the right time to smile. If you start with some humor, then smile with that. Sincerity and conviction is a lot more important in an elevator speech than good looks and a smile and a twinkle in the eye. Trust your judgment.

If you dread it, relax, you’re young, it’s not just you; but take a deep breath, slow down, and enjoy it.

Read the other posts in this series.
Elevator Pitch Part 1: Personalize
Elevator Pitch Part 2: Why you?
Elevator Pitch Part 3: What you offer
Elevator Pitch Part 4: Finish strong

(Note: this is taken with permission from Planning Startups Stories)

This fourth of five parts in this series depends on who you are, where you are, and what you want. If you’ve personalized in the first part, sold yourself and/or your organization in the second, and established the attractiveness or suitability of the business offering in the third, it’s time to finish strong with a closing.

Your closing depends completely on context. What do you want from the person or people you’re talking to? The classic elevator speech context is a venture competition or when looking for investors. But there’s also the true elevator speech for the established company, simply describing your company to somebody who asked, with no real close.  Be honest, you’re not always asking for an order, even when you’re just chatting with the person in the next seat on the airplane. If you are trying to sell then do ask for the order. Seriously: “if you give me a card, I’ll send you a copy with an invoice.” Seriously: ask for the order.  “If you don’t like it, send it back. Here’s my card.”

For the venture competition or investment variety elevator speech, don’t try to convey too much information. Do establish in general terms where you are or what you want. “We’re looking for seed money of half a million dollars.” Or “We’re now raising round-two financing of three million dollars to be used for the mainstream marketing launch.” Or “we’re looking for serious marketing partners able to put money up front in return for privileged first-year pricing.” Or “we’re trying to establish a royalty relationship with an appropriate manufacturer.” And then, ask for a business card, and give one. “If you know anybody who might fit that bill, feel free to recommend us.” Or “please give me a call.” Don’t offer to send a business plan, and don’t ask directly when it’s about investment; reduce the awkwardness by suggesting that your audience might know somebody, not that your audience might invest.

Don’t talk terms in the elevator speech. Just establish what you want or need.

If you’re in a real elevator with a real potential investor, you probably soft pedal: “if you know anybody who might be interested, please pass this along. Or maybe you want a business card and permission to send a follow-up email.”

And if you’re doing an elevator speech in a business venture competition — close with an appropriate call for investment. Venture competitions are always keying on the would-be or hypothetical pitch to the investor, so make it clear. The better ones end up with something relatively definitive like a reference to seed capital or first-round equity investment. Stay general. Make them want more.

Read the other posts in this series.
Elevator Pitch Part 1: Personalize
Elevator Pitch Part 2: Why you?
Elevator Pitch Part 3: What you offer
Elevator Pitch Part 5: Delivery

(Note: this is taken with permission from Planning Startups Stories)

Now explain what that person or organization you’re selling to gets. You’ve personalized the need or want, identified your unique qualities to solve the problem, and now you have to put the need or want in concrete terms that anybody can see. For example:

For a Trunk Club member, when his wife says it’s time, or a new trip or new activity is coming up, or the mood strikes him, he just grabs the phone and calls his Trunk Club counselor. “I need more casual stuff for the golf course, or cargo pants for hiking, or two more slack and sports coat combinations.” She knows his size, knows what he likes, what his wife likes, and what he needs. The new clothes come three days later, with a complete money-back guarantee if he or his wife or partner don’t like them.

Business Plan Pro allows Jane jump into and out of her business plan at a moment’s notice whenever she wants. She can start with the core strategy and build it in blocks, planning while she goes, refining projections as needed. Business Plan Pro is built around a solid error-checked, financially and mathematically correct financial model, and a generalized set of suggestions for outlines, but is also completely flexible for adding and deleting topics and creating a unique business plan. Each task, whether topic or table, comes with easy to understand instructions and useful examples.

Email Center Pro lets a team share an email address like sales@ or info@ efficiently. Emails can be assigned to team members or not, and answered emails are processed and visible, and unanswered emails remain at the top until answered. Furthermore, it manages collections of snippets or text templates to build standard but flexibly customizable answers to frequently asked questions.

In each example here, following on the ones in my previous two posts, we should be able to see clearly how this meets the need or solves the problem. Forget features as much as possible, and illustrate benefits. You’ve already described the person with the situation, and built up your being able to solve it, so now it’s just about the solution. Stay focused and concentrated. People will get one or at the most two unique attributes of your business offering. Don’t confuse them with more.

Read the other articles in this series.
Elevator Pitch Part 1: Personalize
Elevator Pitch Part 2: Why you?
Elevator Pitch Part 4: Finish strong
Elevator Pitch Part 5: Delivery

(Note: this is taken with permission from Planning Startups Stories)

In the next part of your elevator pitch address ‘why you’? Why your business? What’s special about you that makes your offering or solution interesting to the target person or organization you just identified (Part 1 of this series).

This is where you bring in your background, your core competence, your track record, your management team, or whatever. For example:

The Trunk Club invented the best-possible solution to this problem. Founder Joanna Van Vleck first succeeded in sales at Nordstrom’s and then took her personalized shopping-for-other style into a hugely successful first market in Bend, OR. Now, having proven the idea on the front lines …

Palo Alto Software has dedicated itself to business planning for more than 20 years. Its founder is one of the best-known experts in the field. Its current management team grew up with business planning, in the trenches. The 8-person development team has more than 50 person years in the same focused area.

Palo Alto Software has been managing this email problem internally for more than 10 years now, and has been working with its own in-house solution for nine years. It has a very strong relationship with hundreds of thousands of small but growing businesses.

What we focus on here is core competence and differentiation. And, in the classic elevator speech, you have to say it fast. You make your point quickly and go on.

Make sure your point is the right point: benefits to the target customer. It’s not what’s great about you, but rather, what about you lends credibility to your ability to meet the need and solve the problem.

I’ve included two different paragraphs for the same company on purpose. See how the unique qualifications differ for different contexts. It’s the same company, but in the second example it’s relating its speech to Business Plan Pro, the flagship product. In the third example it’s building up Email Center Pro, the new product. The descriptions have to change for each.

You might also think of this as the classic “what do you bring to the party?” question. It’s not just your brilliance or good looks or great track record, it’s fostering credibility for solving the problem.

Its members grab the phone and call. “I need more casual stuff for the golf course, or cargo pants for hiking, or two more slacks and sports coat combinations.”

Read the other articles in this series.
Elevator Pitch Part 1: Personalize
Elevator Pitch Part 3: What you offer
Elevator Pitch Part 4: Finish strong
Elevator Pitch Part 5: Delivery

(Reposted with permission from Planning Startups Stories)

If you can’t say it in 60 seconds, you have a problem. Your strategy isn’t clear enough. Nowadays we call it “the elevator pitch,” meaning a quick description of the business that you could do in the time you share with a stranger in an elevator. It’s becoming popular in the everyday language of the entrepreneur, venture capitalist, and the teaching of entrepreneurship.

I don’t think its academic. I think it’s important. I think it’s a great exercise that everybody in business should be able to do. Let’s get simple, let’s get focused, let’s get powerful.

I’ve been writing lately about the heart of the plan, also called the strategy. What better way to condense it than in a quick elevator speech. If you can’t do it, worry.

Start your speech with a person (or business, or organization) in a situation. Personalize. Identify clearly. For example:

John Jones doesn’t particularly care about clothes but he knows he has to look good. He sees clients every day in the office, and he lives in a ritzy suburb, where he often sees clients by accident on weekends. But he hates to shop for clothes (The Trunk Club).

Article continues below advertisement

Jane Smith wants to do her own business plan. She knows her business and what she wants to do, but wants help organizing the plan and getting the right pieces together. The plan needs to look professional because she’s promised to show it to her bank as part of the merchant account process (Business Plan Pro).

Paul and Milena live in a beautiful apartment in Manhattan, with their two kids. Paul has a great job in Soho, Milena works from home, and neither has time for food shopping (Just Fresh).

Acme Consulting has five people managing several shared email addresses: info@example.com, sales@example.com, and admin@example.com. The five of them have trouble not stepping on each other. Sometimes a single email gets answered three or four times, with different answers. Sometimes an email goes unanswered for days, because everybody thinks somebody else answered it (Email Center Pro).

Notice that in each of these examples I could be much more general. The Trunk Club targets mainly men who don’t like to shop but need to dress well, and have enough money to pay for the service. Business Plan Pro is for the do-it-yourselfer who wants good business planning. Email Center Pro is for companies managing shared email addresses like sales@ or info@. But instead of generally describing a market, I’ve made it personal.

Sometimes you can get away with generalizing. “Farmers in the Willamette Valley,” for example, or “parents of gifted children.” It’s an easy way to slide into describing a market. However, I suspect that you’re almost always better off starting with a more readily imaginable single person, and let that person stand for your target market.

Read the other articles in this series.
Elevator Pitch Part 2: Why you?
Elevator Pitch Part 3: What you offer
Elevator Pitch Part 4: Finish strong
Elevator Pitch Part 5: Delivery

You are if you don’t have a business plan first.

Seriously: how can you boil it down to the core if you don’t know your basic strategy such as your identity, market, and focus? How can you set a scale to it without some idea of reasonable expectations in sales? How can you possibly talk about investment without having figured out how much you need, for what, and what kind of return you’re aiming for?

This comes up more these days because people seem to be confusing the output of the plan — whether it’s formal document, or simple pitch, or something in between — with the planning.

Simply put, not every business needs the full formal plan, but every business needs a plan. Think through and write down (not necessarily on paper, probably on a computer, but somewhere) your core strategy, assumptions, review schedule, dates, deadlines, task responsibilities, and (pause here for breath) basic business numbers. Those basic business numbers are the sales forecast, expense forecast including personnel, startup costs, and startup funding.

Sure, a 60-second elevator pitch is a pretty short piece of information, but people expect it to contain some significant foundations. And, if you think about it for even 60 seconds, the way you figure out how much money you need is by doing those basic numbers and tying them together. You can’t just spout a figure without risking a follow-up question. What are you going to spend that money on? How are you valuing the company right now? What’s your exit strategy? What kind of returns can you talk about?

Take for example the question of how much money you need. You add up your starting costs, subtract what resources you already have, then project sales and expenses and add what it’s going to take to meet expenses during the early months, when sales are just starting.

Or as another example, your target market. Can you describe your ideal customer and can you explain in a few seconds who isn’t your target market? What if you’re asked what you’re not doing? What about your strategic focus or assumptions or whatever.

So don’t say you don’t need a plan because you’re just doing a pitch. You can’t do a decent pitch without knowing first what you’re saying. Without a plan, you’re pitching naked.

And, having said (or written that), I’m going to use this as an introduction to a five-part series on the elevator pitch, starting with part 1 soon. Stay tuned to this channel.

When creating a new business model, you don’t necessarily do it using financials from some other existing businesses. You can create your financial assumptions by estimating the specific details and adding them up. Your expenses are a finite list of estimable items such as rent, insurance, payroll, and so on. Your sales are the product of units times price, and your cost of sales is the product of unit cost times price. Many business plans are developed by adding up detailed estimates.

On the other hand, it is better to compare your numbers to existing businesses when possible. This will give you an idea of how your business will stand within the industry.

1. Check first whether you’re looking for numbers of a publicly traded company, or whether there are one or more publicly traded companies operating in the industry segment you need. To do that you examine the stock market and look for public reports related to stock market companies. My favorite way to do that is through Yahoo! Finance. There are lots of competing services offering financial information over the net, and even the SEC has a site, but that’s my personal favorite.
2. If you’re hoping to find financials of a specific existing business that is privately owned, that’s hard to do. People do have a right to keep their information to themselves. However, there are some Internet resources that might help.
   • Hill Search is one of the most powerful online research tools available, although it has a cost. Signing up from Bplans.com will save you $100.
   • Dun and Bradstreet offers some limited financial information on lots of different companies, but that information doesn’t include expense breakdowns and it isn’t free.
   • Dow Jones & Company offers excellent information on some industries, including good listings of websites for companies, associations, and publications. If they cover one that you’re interested in, you’re in luck.
   • Integra Information Systems has very good industry profiles, but they are for sale, not for free.
   • b2bsalesandmarketing.com (formerly iMarket) offers basic industry data reports by SIC code. Much of what this site offers is for sale, but what’s free is pretty good. You have to register even for the free data. You can get a free industry review by SIC code, giving you how many companies, average sales, and employees.
   • The Risk Management Association offers financial statements by SIC code for collections of companies at different sales level. You don’t get the individual company but you get a composite for the industry, with a lot of supporting detail. They sell a single industry report for about $60, and the entire database for less than $200. [Editor's Note: Prices may have changed since publication of this article. Please see RMA Associates website for current prices.]
   • Hoovers business database has a series of search tools. Here too you can get information on a lot of different companies, but expect to pay for it.
   • CEOExpress has an excellent compilation of additional sites you might try.

That’s a lot of homework for you, but it should move you forward a lot too.

Here is a list of resources for finding business information.

1. We recommend that you get in contact with your closest Small Business Development Center (SBDC). The SBDCs are funded by federal, state, and higher education funds, and they tend to offer valuable consulting and information at unusually low fee levels and often have several free resources.
2. In general, though, the problem of information is not where to find it but how to wade through all that’s available and find the right stuff.You must, simply must, be able to search the Internet. If you are reading this, then presumably you can already do that, so you are ahead of the game. Be sure to investigate the following:
   • Bureau of Labor Statistics – Industry and geographic data on employment, earnings, and demographics.
   • American Fact Finder – Community information from the US Census.
   • Hoovers – A database of over 12 million companies, both public and private.
   • Yahoo! Finance – One of the best sources for public company information.
3. For more formal research, look for a trade association that focuses in your business area. There are lots of them. A good reference library can get you a reference book that lists trade associations. Once you find an association, contact them to see whether they publish a directory or (better yet) a statistical review. You can also use the SBDC’s website research and statistics that has links to these resources.
4. Next, look for magazines. In most businesses, there are magazines that focus on your type of business, so they can sell ads to the businesses that want to sell to your type of business. Subscribe or buy the magazine, get some back issues, and look for industry reviews. If you don’t already have more than you can handle, get back to a reference library and look for indexes of published articles, and find some articles related to your business.
5. Most important, as far as I am concerned, is what I call “shoe leather” research. Find some similar businesses and find out as much as you can about them. Whatever business you’re thinking of, look at your Yellow Pages and see how many are listed. Call them, find out about prices and things. If they have a location, park by it. Count their customers. Then get a phone book for a town a few hundred miles away, call some similar businesses, and find an owner who will talk to you about it. After all, you’re not a competitor, and people like to talk to people about their business. Ask them as much as you can, until they can’t stand answering questions anymore.
6. If you can find somebody selling a business like the one you’re interested in, contact them. Consider buying theirs. At the very least, you’ll get access to their past financial data, which will give you an idea of how the industry works.