What can a small business owner take away from a TV show? Quite a few, if you ask, the new ABC show Shark Tank.
Entrepreneurs present their businesses to a panel of five venture capitalists hoping to secure financial investment in return for equity stakes.
All five VCs had humble beginnings as entrepreneurs, and they all found success in different fields before settling on investing in startups.
Whether your goal is to sell your company or to bring on investors, there is a lot to be gleaned from this program.
Create Your Own Shark Tank (Optional: Lasers)
Many businesses that appear on “Shark Tank” aren’t ready to answer the tough questions investors will ask. So why is that? These are questions that have never been put to them before.
Every business owner must assemble a board of directors to consult when making important decisions. This group can be an informal advisory board composed of specialists or business owners with whom you have regular one-on-one meetings.
The following individuals would be ideal for membership on this board:
A certified public accountant *no jokes about sharks intended* a lawyer
expert in advertising or promotion (for hire, trade, or as a mentor).
Business leaders with years of expertise.
Professional help (in the form of cash, services, or a mentor)
Get tax and legal guidance at all costs because you need the peace of mind that can only come from doing so.
For the rest, learn as much as you can from the most qualified people you can afford to hire. A cup of coffee or breakfast with a mentor could be one of your best investments.
Can You Back Up Your Words With Actions?
Small business owners must have unwavering faith in their ventures and be willing to risk everything for success—if success exists. An independent board of directors can advise you on this matter.
Many business owners recklessly take on debt by mortgaging their houses, cashing out retirement accounts or college savings funds for their children, charging their credit cards to the limit, and borrowing money from relatives and friends.
Most of the time, this capital is put into a business plan with little chance of success or is lost forever because there is no budget, or the budget is based on false expectations.
You should hire a qualified public accountant to keep track of your finances and make projections, and you should consult other business owners for advice on avoiding common problems.
When your own money is at stake, it’s tough to maintain objectivity and detachment.
Tell me, please, where the nearest exit is.
When planning, it’s essential to visualize the final result as the initial step. To what end did you decide to launch your own company? Is this intended to be a business passed down through the generations, or is it more of a means to an end for you?
The owner’s departure strategy profoundly affects business formation, financing, and operations.
Many business owners make the mistake of not preparing for their eventual exit, which forces them to sell at a loss because the company is unappealing to potential buyers or forces them to pay exorbitant fees in taxes, fines, and legal fees to pass it on to their heirs.
Knowing how you will leave the business is just as crucial as knowing how to enter it.
Even if you have no intention of selling your firm, you can still profit greatly by thinking about it from an investor’s perspective or as though you were opening a franchise.
Where did you say that?
You will have to endure the boredom and discomfort of learning corporate jargon. The accounting, financial, marketing, and legal departments all count.
Statistics can’t lie. Your company’s financial statements provide a wealth of information to an informed reader about the company’s health and profitability.
If you can’t read and speak the language in which they are written, you’re flying blind in your business, and people will notice.
I can’t count how often my small business clients were taken aback when I, as a certified public accountant, pointed out in minute detail the areas in which their business was faltering or the opportunities it was missing.
Anyone who can read the language of your financial statements can learn a lot about your business, especially between the top and bottom lines, where most business owners like to look.
Inching upward? Your Speech in the Lift
You’re not in the business of peddling goods or providing services when you go it alone. You’re offering an original service or product. You’re trying to make a name for yourself and your company.
An elevator speech is a clear overview of who you are and what you do that can be presented in the time it takes to ride an elevator (often one to three minutes).
You should repeat this speech until it becomes as natural as giving your street address.
What’s the big deal here? There are several benefits, but perhaps the greatest is that it prompts careful consideration of your company’s priorities.
An excellent elevator pitch will outline your company’s values, goals, target market, geographic reach, and differentiating factors.
Without a well-thought-out plan, this is next to impossible to achieve efficiently. Few people will take you seriously if you haven’t worked to write up your company strategy professionally.
Say it with me now: Da-dunt, Da-dunt, Da-dunt…
Sadly, many potential “sharks” exist beyond the confines of “Shark Tank” to prey on unsuspecting business owners. Suppliers, workers, banks, rivals, creditors, and others all fall within this category.
Sharks will destroy your business, dreams, and fortunes in the ensuing frenzy if you don’t master these five lessons.
Don’t make your company become another Jaws sequel; there have been enough already.
The Small Business Coach, Brad Harmon. I’ve been where you are, whether you run a typical small business out of your home or are a network marketer. You can expand your small business by learning from my experiences and clients. Please visit my website at http://www.bradleyaharmon.com for more helpful advice if you enjoyed this article.
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