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.