Part 2 of the Start-Up Concept Guide covered the Growth Potential & Industrial Experience of start-ups. The concepts explained included intellectual property, business forecasting and turnover.
In the third edition of this Start-Up Concept Guide, we explore the Market Dynamics of a start-up. The information provided below wil help you understand how to determine the marketability of your product.
Be sure to do your homework. Investors will always ask who your competitors are– who is providing a similar product/service and how? They want to understand where your business fits in the market and if you will have a sufficient customer base to generate enough revenue to grow your business.
Customer Segments – which people are you making use of your product/service? Who are the potential users and paying customers?
MARKET DEMAND AND PRICING
It’s important to understand the pricing of product/service, who you will be selling to and how many people will take up your product/service. This will help funders assess if there is enough demand to generate continuous revenue that will enable the growth of your business.
Revenue Streams – How much will you make? How does your revenue streams link to your market and value proposition? How do you generate revenue? Which value are your customers in the targeted segment willing to pay?
Pricing – how are you costing your product/service for each customer segment compared to the market?
THE ELEVATOR PITCH
A short, impactful pitch that tells potential investors, business supporters and customers about your busines all in 30 seconds. An elevator pitch is one of the most powerful marketing tools a founder has at their disposal and having one on hand will set you apart from others. By using the same structure for your pitch, you can tailor it for your targeted audience be it a potential investor or customer.
To draft an effective elevator pitch, these are the essential questions you need to answer: