A quick analysis of these elements can help you prepare your operation for the transition and could make a significant different in the realized value of your business.
When you have been developing a product for months or years, there comes a time when you have to focus on getting seed funding or other sources of investment. Pitching, just like networking in general, is about building relationships and communicating well about why your product or service is a winner. Take the time to hone your pitch and try to avoid common pitfalls.
Consider these tips:
- Focus on the problem you’re solving.
New entrepreneurs often talk about their companies in terms of what they do (“we make X, we offer Y”). Instead, focus on describing WHY your product or service matters. Frame your story from the end user’s perspective, e.g. “Dog owners are struggling for control when walking their pet, so we help them by…” Explain the pain point, and how you’re solving the problem. Use stories to help bring concepts to life. Bill Feldman, Portland native and entrepreneur, created the Liberty Wristband after walking his dog Henry. His dog was constantly pulling the leash of out of his owner’s hand, and Bill engineered a unique solution that he is now taking to market.
- Don’t use jargon.
Ditch the buzzwords, acronyms and any industry jargon that requires a dictionary or advanced degree. You want everyone to understand and connect with what you’re saying instantly.
- Adjust your pitch to each situation.
You likely have an elevator speech you’ve practiced. This pitch makes a compelling investment case in a minute or less, and there is a time and place to use it. When you are engaged in casual conversation, be sensitive to the give and take; don’t deliver a monologue about your idea.
- Don’t pitch your resume.
A good pitch focuses on what you’re doing, why you’re doing it and how it’s going to make a difference. This isn’t the time to cover the general work and educational background of everyone on the team. Don’t include all the companies where you worked or schools you attended during initial conversations.
- Hold off on the crazy projections.
Perhaps your friends and family are impressed with how you will grow from 10 to 10 million users in two years. Investors and experienced businesspeople don’t want their time wasted with growth projections, which are best guesses. Describe your business now and what resources it will take to scale.
- Consider feedback a gift.
There’s a lot of personal pride involved in any venture. Put it aside when pitching your company. Expect people to have tough questions. They’re not attacking you personally; rather, they’re thinking about your idea from their points of view. Learn how to take critical feedback to make improvements.
When is it too late to sell your business?
On average, over half of the business owners that contact brokers have distressed or declining businesses. These businesses may be suffering from owner inattention, lack of innovation, cash flow problems, or even heading to an imminent bankruptcy. Many, on the advice of advisors, contact a broker hoping a sale will solve their problems. These businesses are often called distressed, turn-around or pre-liquidation opportunities.