How To Efficiently Pitch a Business Idea

Content:

1. What’s a negotiation?

2. What are the stages of the negotiation process? 

3. How can you win any negotiation?

4. How do you introduce yourself in 30 seconds?

5. What makes a successful business pitch?

What’s a negotiation?

A negotiation is a form of communication in which one of the parties has to convince another in something so that together they reach the desired outcome regarding a certain issue. Negotiations go beyond the business world, they’re part of our everyday life: for example, arguments with family and friends over weekend plans, or job interviews.

Here's how to tell that you are negotiating: 

• Parties have mutual dependence on each other;

• Each participant has their own needs to resolve during a negotiation;

• Parties have different interests;

• Both parties have the right to veto;

What are the stages of the negotiation process? 

Preparation. To have a successful negotiation, you need to first learn more about both sides of the discussion and the negotiation process itself, namely its conditions and your opponent’s tactics, strengths, weaknesses, and goals. At the same time, you have to determine three potential outcomes of the negotiation: the best, worst, and average results that will satisfy both parties. But bear in mind that your goals can change during the discussion.

Contact. First impressions are powerful in negotiations, and appearance plays a key role in starting business relationships off on the right foot. A formal business attire is always a safe bet when dressing for a formal event. Before going into a negotiation, make sure to set your goals and general rules of communication. For instance, if your opponent starts insulting you during a negotiation, you have the right to abandon the discussion altogether. You can also start off with an appropriate business complement that must consist of three components: an observation, a fact, and an open question. For example, you can say that their business tripled in a year – that’s quite an achievement and you’re wondering what their secret to such rapid growth is. 

Discussion. You should keep in mind that a negotiation process can take a long time and include several stages. At first, your opponent may resist and not agree with you, then they will listen to your offer, think it over, and put it to discussion. If successful, they will be willing to concede to make a deal. 

Negotiation. At this stage, parties have different objectives: while one of them demands a discount, the other puts it down and promotes their own offer. To win this stage, you need to keep a few things in mind: 

• Don’t set the price first, otherwise you won’t be able to increase your value later on;

• Don’t say YES to the first offer – have a good think about it;

• Give a price 15-20% greater than the market one. This way, you won’t decline much in price if your opponent asks for a discount; 

• Use different bargain tactics: offer 3% or 0.1%, not 5% off your product;

• Schedule bargains for the next meeting to score the best deal;

• Educate yourself on pricing and let go of some services;

• Stick to your offer;

• Quibble about the details to get a discount. 

If you’re going to offer discounts, you need to make sure that they will benefit you, too. By giving a good discount, a company can receive prepayment, a large order, establish long-term cooperation, or get a new customer in return, whereas an entrepreneur can use such offers to win negotiations and receive valuable feedback. 

Agreement. You should record the key agreements and results achieved during a meeting. You can then sign the protocol to avoid any confusion and fraud, as well as chart your next steps. 

Closing. Close the deal by asking yourself the following questions: Did the meeting fulfill your needs? What did you want to achieve and what did you get? Where are you standing after the discussion? 

How can you win any negotiation?

First and foremost, you should define your negotiation position because it will dictate how you communicate with your opponent and which negotiating techniques you will use. A position in a negotiation depends on a customer’s need for your product and your unique offering. 

• If a product possesses these characteristics, both parties will aim for a partnership; 

• If your product isn’t unique yet is highly demanded, investors will trade to reach an agreement; 

• A one-of-its-kind product will make investors thoroughly study the market to figure out its value; 

• A product that lacks both criteria will leave customers uninterested. 

Negotiating techniques: apply and battle

Counterargument. If your opponent makes an offer, don’t rush to settle – put your suggestion forward instead. For example, if they want you to make concessions on one matter, you’re entitled to ask them to sacrifice something else. 

Power. You can choose to hide behind the back of some powerful person who makes all the decisions, this way they won’t be able to easily turn you and your “boss” away. 

Good cop, bad cop. This tactic involves two people who try to achieve something together by one of them being kind and friendly and the other pressuring and refusing any offers to make you go for an unprofitable solution offered by the “good” companion. Here, it’s important to understand who you’re dealing with and communicate precisely with the “bad” one. 

Salami tactics. It evokes the idea of making a person sacrifice little by little in the same way as one might slice up a salami. This tactic is perfect at the end of the negotiations, when the parties are so exhausted that they are ready to go with anything offered. To avoid the fate of salami, come with a brief list of compromises you’re willing to make and ask for something in return. 

Take-it-or-leave-it. Make a fixed offer or ask your opponent for their best offer to make them think of other ways to reach a deal. In response, you can discuss the initial conditions and together look for the most beneficial solution. 

Pressing deadlines. You can purposely wait till the last minute to force an opponent to agree at all costs. Here, a countertactics can be to keep them unaware of deadlines and postpone the negotiation. 

You can also turn to the five negotiation rules of prominent Soviet Foreign Minister Andrei Gromyko: 

• Listen to your opponent to gather information;

• Then ask questions to direct your dialog to the right track;

• Build your own scale of values. By saying that you have multiple other people interested in your product, you can lower them on the scale of values;

• Make a proposal that will convince a buyer that they will benefit by lowering their standards; 

• Keep your opponent wondering. Don’t give clear answers.

See also:

Ten Questions to Ask Yourself Before Starting a Business

How To Determine Your Startup’s Target Audience and Value Proposition

Best Startup Projects at ITMO Accelerator’s Demo Day 2022

How do you introduce yourself in 30 seconds?

The first thing you should do is to analyze yourself and build your answer with the following steps: introduce yourself, say what you do, provide examples, and finish with how your project can benefit other people. Take, for example, Karina. She is a brand designer and freelancer. She’s created a brandbook for an online store, thus doubling the number of its visitors in six months. Karina can help you create your own style: develop a logo and choose fonts and colors. 

What makes a successful business pitch?

An elevator pitch is a brief presentation about your project or idea aimed to spark interest in what you do. Within one minute, you should cover the following topics: 

• Who are you and what do you do? 

• What’s your idea and business plan? 

• How are going to make it happen? And who will help you?

• How much money will it take and when will it pay off?

• Why do you believe in your project? 

If you want to master elevator pitching, read Everything is Negotiable by Gavin Kennedy, while Guy Kawasaki, a venture investor and one of the first employees at Apple is a great help when you’re doing a presentation. Don’t forget to add the following slides to your presentation: 

• A title slide with the name of your company, your name, position, and contact details;

• A problem;

• Your solution;

• Underlying magic/technology;

• Your business model;

• Market entry strategy;

• Analysis of your competition;

• Team: key members, trackers, and investors (if any);

• Financial forecast with key metrics, such as conversion;

• Your product’s current status and timeline.

Entrepreneurial Competence Training is a part of the project Platform of University Technology Entrepreneurship. The educational events take place in six Russian cities, where students can learn more about creating a technological startup, evaluating the market, building a business model, attracting an investor, forming a team, and many more. Among the speakers are entrepreneurs, soft skills lecturers, psychologists, specialists in accounting, taxation, and management of small businesses, as well as business consultants and other specialists. The training sessions are conducted by Russian Venture Company, ITMO University, and the startup studio Open Innovations (Otkrytye innovacii).