Sunday, December 23, 2007

The Elevator Pitch

When selling a spec script in Hollywood, the pitch lives or dies on the opening sentence called a "logline". Here is a sample for the movie "Gladiator": "Roman general betrayed by emperor's son comes to Rome as gladiator in search of vengeance." It tells us in a snap shot who is the hero and villain plus identifies the conflict and the hero's quest. A business plan's effectiveness as a tool to raise money operates in much the same fashion. You have to sell the target with the first few sentences on page one. Stumble out of the gate and your probabilities of a successful pitch plummet.

I call the opening paragraph of a business plan the "elevator pitch", a logline for the business startup world. What goes into an elevator pitch? It's a synthesis of the five basic questions that underly any business plan:
  1. What do you sell?
  2. Who do you sell it to?
  3. What customer need does your product or service fill?
  4. How will you reach the target customer?
  5. What is the competitive advantage of your product or service in filling this need?
That's a lot of ground to cover in a few crisp sentences so precise language is required. No filler words. Make it all count. When identifying the target customer, be specific as possible.

As example, we'll use an online legal forms system contained within my web publishing company,®. Let's go through the questions.
  1. The product: online interactive legal and business forms.
  2. The customer: small business owners and individuals throughout the United States.
  3. The customer need: ability to self-create legal and business forms reducing legal fees.
  4. Marketing: leverage the established online footprint of the parent web site to market through search engines.
  5. Competitive Advantage: Combined skills of forms system creator as attorney and computer programmer lead to extremely low overhead while maintaining quality.
Let's mash that together and see what we get. Although this legal forms business currently does not possess a separate name, let's refer to it as "Online Documents, Inc."
Online Documents, Inc. sells online interactive legal and business forms enterprise targeting small business owners and individuals by leveraging the established® web presence for search engine marketing. It enables customers to self-create legal and business forms reducing legal fees. Our competitive advantage the key employee as both attorney and computer programmer leading to extremely low overhead while maintaining quality.
There it is. Two to three sentences. Crisp. Quick hitting. Don't start on the rest of the business plan until you have polished the elevator pitch. Write a bad opening paragraph and your business plan is doomed as a sales tool.

Business Plan Template, an online business plan creation tool $24.99 (free trial).

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