5 Business Pitch Lessons Learned from ‘Shark Tank’
Finding investors for your business can be a key component of your company’s success. However, before any investors agree to help finance your company, you will likely need to show them how investing in your business will benefit them. That’s where the pitch comes in. A pitch done well can be entertaining and exciting – there’s even a whole TV show around the subject.
In ABC’s “Shark Tank,” entrepreneurs try to convince savvy investors, “the sharks,” to finance their companies. Some of the pitches on “Shark Tank” are an entertaining “what not to do” lesson, but other entrepreneurs wow the sharks with their innovative products and inventive pitches. So, we’ve gathered five business-pitching lessons you can learn from the more successful “Shark Tank” entrepreneurs:
Plan for growth. If you are asking for investors, you likely want to expand your business. Make sure you have a plan in place to make this happen. If your business currently operates on a very small scale, do you know practical ways to increase production to accommodate increased demand? Do your homework, so you can satisfy your potential investors’ questions.
Create goals and strategies for the requested investment. It’s important to have your ducks in a row before the big pitch. Know what your goal is for the investment: How much are you asking the investors to give you, and what do you plan to do with the money? It’s easier for investors to feel confident giving you money for your project if they have some idea of how they will be getting it back.
Know your bottom line. Make sure that you know what your business’ financial situation is. What are your profit margins? What kind of growth do you project? If you can’t answer these questions, your potential investors don’t have the necessary information to decide to invest in your company, and they also will likely question your business acumen.
Beef up your negotiation skills. When looking for investors, there’s no better situation than having multiple investors competing for a piece of the pie. However, if this is the case, it’s important to keep in mind what factors will attract the potential investors, and take them into account when you’re discussing the details of the deal. Entrepreneurs who change their minds about offers or who only care about making money for themselves will not be perceived as good business partners. Know how much you need and what you can offer in return. Then, when the right bid comes along, don’t haggle: Take it.
Set your limits. Before you go into the negotiation, make sure you know two more numbers: the lowest amount of money you’re willing to take, and the highest of percentage of your profits you’re willing to give up. You should make sure these numbers are reasonable – both for your own interests, and for the potential investors. On “Shark Tank,” entrepreneurs sometimes go in with a request for a high dollar amount in exchange for a small percentage of the profits – and the sharks almost always ask for a greater share. Know what you’re willing to do beforehand, so you don’t make a spur-of-the-moment decision you might regret later.
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