This post is by Goldman Sachs as part of their sponsorship of The Huffington Post’s What Is Working: Small Businesses
What would you say about your small business if you had three minutes in front of Warren Buffett?
This is a question frequently posed to participants in the Goldman Sachs 10,000 Small Businesses program. One of the key tenants of the program is creating an elevator pitch — one good enough to be delivered to one of the program’s advisory board members, the Oracle of Omaha.
The goal of an elevator pitch is to cover only essential information about you and your small business. Your speech should be efficient, effective, and compelling. It should explain what your business is, the problem it solves, why it has potential for growth, and why you are the one to lead it. The pitch should be three minutes or less and help a potential investor understand enough about you and your business to recognize the opportunity and want to know more about how they could partner with you to achieve business growth.
Working on perfecting your own elevator pitch? Below are five critical elements you will need to include to get investors excited about your small business opportunity.
1. Hard Numbers Investors may love your product, your enthusiasm or the potential opportunity, but unless you have the data and hard numbers to back up your projections and needs, they won’t be able to commit. Know the percentage of growth you can expect, how much money you need to achieve this growth, and when the investor can begin to expect a return.
Don’t Say: “I think I’ll need a large amount of capital. People have said they want to do more business with me.”
Say: “I need $100,000 because my two largest clients are planning to increase their orders by 25 percent over the next 12 months and I need faster equipment to accept this opportunity.”
2. Excellent Research Explain how you arrived at your numbers, where the research is derived from, and why you believe it to be the best measure or indicator of the current market. Include a few key data points in the pitch and have additional points in your back pocket to use when answering questions.
Don’t Say: “I’ve seen in my restaurant that the market seems to be shifting toward more demand for sandwiches.”
Say: “Our analysis of 12 months of customer-spend data shows that people are buying 30 percent more sandwiches than a year ago.”
3. Reasons Why YOU Are The Expert No one knows your business or your industry better than you do, so make sure you establish your credentials and that you understand your clients’ needs. Investors need to know they are putting their money behind someone who truly understands the fundamentals of their sector.
Don’t Say: “I really like dogs, so I started Paws Grooming from my home office.”
Say: “After 10 years of experience in a vet’s office, dog walking and looking after foster puppies, I saw a gap in the market I knew I could fill.”
4. Passion That Shows Your business is meaningful to you; let investors know that. They want to see someone who is committed to the success of the business and passionate about what they do. They don’t want to support someone who is only after money. Explain why you love your business, why it is important and why you believe in it. Confidence is contagious — so spread the enthusiasm.
Don’t Say: “I didn’t know what to do after college and a friend needed a business development partner.”
Say: “I believe that children should have a healthy meal every day and this is the fundamental driver of my business.”
5. A Memorable Closing When giving an elevator pitch, entrepreneurs are often so focused on delivering the right information with the right data that when it comes to the conclusion they wind up saying, “So, that’s my business… any questions?” The closing is the opportunity for you to say where you want to go next and draw the investor into a longer conversation or follow-up. Keep it strong and on point.
Don’t Say: “That’s about all I have to say. What do you think?”
Say: “To pursue the opportunity I just outlined, I need financial backing. I would love to discuss further how we could work together on this project. Shall we meet next week?”
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