If you’ve never watched the Network 10 TV show Shark Tank, I recommend you do. Particularly if you’re a buddy entrepreneur or a business owner, or your business needs that something! The basis of the show is that business owners and entrepreneurs pitch their business idea’s to a panel of experienced & successful entrepreneurs (Sharks), seeking mentorship and financial investment.
The Sharks listen to each pitch, ask questions and make a decision whether or not to invest their own funds in the business. So what do the sharks look for when making the decision to invest.
· Know your numbers. Cashflow for every business is critical, but knowing your numbers is more than that. Decision making within your business needs to include the cost to run your business, profit performance over recent years, projected income, churn rates and expenses as well as contractual agreements. If you aren’t aware of your numbers and aren’t regularly reviewing them, it will only be a matter of time before you are caught out financially. If you don’t understand your numbers, how can you expect others to trust your business decision making. No Shark will invest in an entrepreneur who can’t provide details of financial situations when asked.
· Understand your target market and competitors. Every business owner and entrepreneur is constantly reminded to know their target market and ideal client. Failing to grasp what your ideal client wants, needs and desires will see you waste money on advertising. Ensure you can demonstrate that you are customer centric – you know what matters to them and what frustrates them.
· Show your passion. Remember not all investors will see the same value as you, so your pitch will need to be professional, accurate and clearly display your passion for your business as well as its success. Pitching your idea or business can be confronting, particularly if it’s before 5 successful entrepreneurs. Being devoted to your business is critical, should reflect in your pitch. As Steve Baxter has clearly stated before on the show – Why should he invest his money if you’re not 100% invested in your own business?
· Have a business plan. Contestants on the Shark Tank are pitching for cash investment and mentorship. A plan will help you define your path to success, including innovation and growth for the future. How can you ask for investment and guidance if you don’t know your own plans for the future?
· Know your investors. When selecting an investor, other than providing cash for your business consider what else can they bring to help your business grow. Choosing the right ‘Shark’, will open the door to new business connections in the right industry, perhaps real-life solutions to obstacles you may also encounter, or a foot in the door in the overseas market you are looking to expand into. Remember the right investment partner will be worth more to you than the funds they inject into your business.
So whether you plan to pitch your business idea on Shark Tank, or not – Shark Tank is one TV program that can teach you how to start or operate a better business.
In closing, remember not to underestimate who you are pitching too. If you’ve chosen the right investor to help take your business to the next level, respect the feedback they provide to you – irrespective of their decision to invest. The words they offer you in response to your pitch will be lessons on their own.
If you are pitching for investment & mentorship – Good Luck.
by Sam Spence – Founder & Principal Executive Assistant, Executive Virtual Associate.