Even with a good business idea, an entrepreneur still needs the financial resources to turn that idea into reality. Among the very first steps he or she must take to actualize his idea is to make a good, convincing pitch to potential investors.
[related|post]The so-called “elevator pitch”—a proposal relayed in all the three minutes that it takes for an elevator to reach a high floor from the ground—is what a good business presentation should be. It means that all important information must be condensed into a short and convincing story.
A good elevator pitch has four points: 1) information on the product and its competitiveness, 2) the potential growth of the product, 3) specific plan on how the potential will be achieved, and 4) the funds needed from the investor so the plan can be executed.
All this information will serve to grab the attention of the investors and keep them interested without you having to go into details right away.
A good elevator pitch should flow like this hypothetical presentation: "Product A can potentially capture 5 percent of a P10 billion market that is growing by 10 percent a year. We believe we can generate revenue of P160 million in three years. We will do this by placing the product in at least 80 percent of major grocery stores nationwide. Getting a capital of P20 million will help us complete the second phase of our product development and put our marketing strategy in place."
The above is shorthand for what Edmondson calls a “creative economy story.” It is concise and compelling, he says, and as such it can be used as a springboard for creating all business and communication documents for presentation to potential investors.
In “The Bioscience Commercialization Roadmap” presentation that he delivered at the Philippine Biotechnology Venture Summit in Manila organized by Businessmaker Academy and Hybridigm Consulting in January 2006, Edmondson prescribed the following steps in creating this kind of story:
- Conduct market assessment
- Define your customers
- Position your product
- Determine marketing strategy
- Prepare communication strategy
- Develop sales tactics