You have probably watched the hit TV show Shark tank, or at least seen it being advertised. It’s been on the air for 10+ seasons and it really helped to bring the world of entrepreneurship mainstream.
It made people understand that they could do anything they dreamed of, as long as they were willing to work hard (and it was a good viable idea). There is a lot you can learn about business just by watching the show. The way the guests pitch and conduct themselves, to how the sharks respond and what questions they ask — it’s a great business lesson every episode.
Actually, there are many valuable business lessons brought to light each episode, so let’s go over a few of the most important ones right now.
You Have to Always Be Prepared
Preparation is key — in the shark tank and in real life — and when someone who is pitching in not prepared it becomes very obvious and very quickly. The sharks have no problem calling them out on the spot and letting them know that they made a huge mistake by entering the tank unprepared.
“One way to fail is to never be prepared,” says Lisa Rush of phone support outsourcing company Staff Outsourcing. “You have to always be prepared for every aspect of your business — every day.”
The minute you aren’t prepared you let your guard down and you become every vulnerable. This is when little costly mistakes are made that can ruin your business and have a negative impact on your future growth potential.
Always Know Your Numbers
I can’t tell you how many times I have watched this show and when the sharks ask a question like, “What does it cost to make?” or “How much does it cost you to acquire a customer?” — and the person has a deer in the headlights look on their face.
“Not knowing what your customer acquisition cost is for example, just shows how unprepared you are,” says Henk Schipper of Jaloezieen Fabriek. It’s impossible to run a successful business without knowing the numbers inside and out.
This goes without saying, but if you are ever talking to potential investors and you don’t know your numbers, how do you think they are going to react?
There is no way they will part with their money and give it to someone that doesn’t even know what a customer costs to acquire. From online resources that help find contractors to hire, to e-commerce beauty brands — every customer has a cost tied to them.
Understand The Value of Partners and VC Money
Bringing on a parter or an investor is going to end up costing you money. You have to fully understand this. If you take on an investment you are giving up a part of your company.
“Funding is not easy to come by, no matter what Silicon Valley makes you believe,” says the owner of National Pool Fences. “When you do have the opportunity, understand fully what that means.”
Are you prepared to give up 25%? 30%? If the business takes off and becomes successful you never regain that stake. Be 100% certain that you can live with all of the possible outcomes before you sign on the dotted line.