A few months ago I read that if you need more than a minute to explain a business idea so that someone understands it, perhaps you don’t have a business: your idea may not be viable, or it may be aimed at too narrow an audience and therefore lack a big enough market.
In the same way, and giving the business plan the importance it deserves when seeking investment, we can spend whole weeks preparing the document, even writing 15 pages explaining why our project is worth investing in. But if you can’t summarise that business plan in the time it takes an elevator to reach the fifth floor, we’re in the same situation.
The problem we sometimes run into, especially with some startups, is that after 20 minutes of them explaining their business model, we still don’t quite understand it. The mistake is to frame the language so professionally that only a handful of people grasp the idea. We wrongly assume that a professional-sounding explanation will give us an advantage over a simple one, and we usually end up losing a wider audience, or people simply never fully understand our project.
TechCrunch showed a very simple exercise for explaining a business idea in just a few sentences, so that no time is wasted on unnecessary details, we manage to capture the attention of the person receiving the message, and from there that person can ask us about the substance. Try explaining your business idea like this:
My company (company name) has developed this (product or service) to help (defined audience) solve (specific problem, need, or to encourage x) with (explanation of how the product helps this defined audience).
If you can explain your business this way, you really don’t need much more: brief, clear, concise language that anyone (expert in the field or not) can understand. It’s enough to capture attention and give the other person the chance to ask for more specific details. If we get the listener to ask questions, we’re creating interest; in fact, once someone asks, the interest is already there, and the job is simply not to blow it with the explanations that follow.
See also: Business ideas: a summary
Selling an idea
It doesn’t matter whether you sell combs, insurance or investment funds… Every product requires the same steps for a sale to close, and when you’re seeking investment, the business idea is the product and the investor is the buyer.
What I mean is that any sale, whatever it is, requires:
- An introduction (name, company)
- Drawing out a latent need (if there isn’t one, you create it)
- Meeting that need (what a person requires to stop having that need, or to save time and/or money)
- Presenting our product (how our product will help solve the need that existed or that we have created)
- Closing the sale
There is no sale in which these steps are missing. Remember that, outside stand-up comedy, as a rule few people manage to give a talk their full attention for more than 30 minutes. How long would it take you to explain what your business is about?
Featured image: Tech.Co, CC BY-SA 2.0, via Flickr.
