As a young freelancer — especially a traveling freelancer, it seems — I am constantly approached by young entrepreneurs who have brilliant (or self proclaimed money-maker) ideas waiting to blossom. Obviously when I’m being approached it’s an online idea and someone’s in need of a website/web-app.
When I was younger, I jumped on these ideas. My first year freelancing was spent half freelancing, and half developing budding business ideas, searching for that one money-maker; my bread and butter that would alleviate my bank account for my families life, and hopefully generations to come. Fast-forward 5 years and I’ve learned that not all business ideas are created equal. With that in mind, there are a few things I’m looking for when listening to an entrepreneur’s elevator pitch:
- Who is our target demographic?
- What need/gap in the market are filling?
- What’s our 1 year projection? What’s our 5 year projection?
- How are we going to market ourselves?
- What is my role? What is your role?
- What’s our exit strategy?
Who is our target demographic?
If you can’t tell me to a tee who the target demographic is, then I’m not interested. Describe the person. Where do they live? Who are their friends? What do they do on weekends? What are their hobbies? How tall? Hair colour? Marital status? … Get the picture? I want to know what cologne the guy wears. This way when we’re trying to approach single 15-25 year old males who enjoy rock climbing, we know where to start.
What need/gap in the market are filling?
Has anyone else done this already and is it already being done better than we can do, knowing our first few years will most likely be bootstrapped? I’m not interested in making a search engine for students if I think Google’s search algorithm will fair better than our nice colour scheme. Where has the competition succeeded? Where have they failed? Is there still a market available to corner? Perhaps a niche or micro niche? What are the statistics of that market?
What’s our 1 year projection? What’s our 5 year projection?
I don’t need to own a yacht and have endorsements out the ass in a year, but I need to know that you have thought realistically about our future; my future.
When will this be profitable, how profitable, and how will we get there. What are projected roadblocks and how are we going to deal with them knowing that dumping money into it may not be a feasible solution.
How are we going to market ourselves?
Where’s our advertising going? How much will it cost? Do you have prior knowledge of this advertising working for people in our situation? How do we differ from others trying to mimic our ideas? What are some rough landmarks you have in mind, if any?
What is my role? What is your role?
How much work am I doing, and how much work are you doing; plain and simple. Who’s in charge of what and is there anyone else in the deal, how are earnings going to be split accordingly.
What’s our exit strategy?
This is almost a follow up if all other questions have been asked… Supposing we get into the idea and decide to part ways, what’s a fair way of handling work that has been done thus far? Who gets what, and how is it decided?
Conclusion
The bottom line is if you can’t answer a few basic business questions, then your not pitching a business idea, you’re pitching a fantasy. Have you ever seen Dragon’s Den? In our case, you’re my Dragon, and I’m yours… Get your business idea in order and I’ll bring what I can to the table.
