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What Small Businesses Can Learn From 'Shark Tank'

Whether or not you’re seeking investors in your business, maybe it's time to re-evaluate your business and think like a Shark.

I am a big fan of ABC’s Shark Tank for many reasons. How the “sharks” interact with each other is definitely entertaining, but how they interact with the candidates who are seeking an investment can actually be educational.

Each week, entrepreneurs who believe they’ve come up with the next great thing, visit the Shark Tank and try to convince one of them to invest in their company.  They ask for an amount of money in exchange for a percentage of their company.  One by one the “sharks” ask questions to determine the company’s value and whether or not they want to invest. It’s fascinating to see how each company brands itself—some are fantastic and some are horrible. 

Whether or not you’re seeking investors in your business, wouldn’t it be beneficial to look at your company the same way a potential investor would? This could be just the perspective you need to become more profitable.  

I’ve compiled a list of concerns often voiced by the "sharks." Review these to determine if your business passes the Shark Tank test.  

  • Money.  It always comes down to money. Do you make any? Have you lost any? Profits and Losses are a huge factor for investors. How does your P&L look? 
  • How old is the Company?  How long you’ve been working at your business and how much it’s worth factor into whether or not it’s a good investment.
  • Marketing. Does your packaging and marketing adequately describe your product or service? If not, it may be hurting your sales.
  • A full-time job or a hobby? If you’re not working in your company full-time, it is more of a hobby. Most “sharks” won’t consider investing if you’re not fully committed to making it a success.
  • Does your product or service fill a “need”? Differentiating your company from competitors is a huge advantage. This should be part of your marketing strategy.
  • Are you too close to your brand? Many entrepreneurs refer to a business as their “baby” and this could be detrimental to growth. Step back and have some perspective.
  • Are you accurately valuating your company? Use hard numbers to determine the value of your company; there is no room for guessing. A quick search came up with this online evaluation calculator

If you haven’t seen Shark Tank yet, it airs Friday nights on ABC. I suggest you set your DVR and have a notebook handy. 

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Steve Hildreth December 19, 2012 at 12:00 AM
I would also include “Listen”. Instead of justifying and being protective, listen to what others say. If one person says it, how many think it? The goal should be to make the product the best it can be and strive for continual improvement.

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