There are fewer and fewer things I enjoy watching on TV, but once in awhile, I enjoy watching "Shark Tank." For those who are not familiar with the TV show, the general concept is people bring their product or business into the “Shark Tank.” The Sharks are some very financially successful businesspeople. The Sharks learn about the product or business to determine whether they are willing to invest into the presenter’s business in return for some equity in the company. So what have I learned from watching?
- Know your numbers! Some people are completely clueless on their financials. They might have a good product, or even a good business idea, but they simply don’t understand the numbers and can’t answer important questions. Sometimes that leaves them with totally unreasonable expectations.
- The sharks can be brutally honest. They will tell presenters things like, “You don’t have a business, you have a hobby,” or “You are taking the wrong approach,” or “You have a long way to go before I am ready to invest in your company.”
- The Sharks call out fakes. When someone comes in with a gimmick product or something that does not have valid research, they have no time for that person or business and send them packing in a hurry.
- Criticism can be very harsh. Some people readily acknowledge, accept and appreciate the harsh criticism and some ignorantly will fight back, argue and defend their wrong approach. Did they forget who they are talking to?
- Sharks usually compete with each other, but sometimes they collaborate. The competition can be fierce but they also know when it would be good to work together.
- Sharks know how to negotiate. Some contestants do and some do not. Some contestants know a fair deal and recognize that by giving up a little they may gain a lot. Some pass up great offers because they get stubborn and forget the opportunity in front of them.
- Sharks are risking their own money. It’s easy to talk big and spend someone else’s money, but it becomes all real when you’re spending your own money.
- Sharks can judge character. I have seen Sharks turn down good ideas from people that had bad character or personality issues and I have also watched them make offers to people based on good character and work ethics.
- Sharks know what they’re good at. Sometimes they say, “I like the idea, but that’s out of my space. I’m out.” Rarely do they invest in something that is not in their wheelhouse.
- You don’t always have to make a deal with a Shark. Sometimes they want too much of what you have already started and it may be best to walk away without a deal.
Agriculture is its own shark tank. Sometimes you are the shark and other times you are presenting your ideas to sharks. For many, their own family is like being in a shark tank, and at times that may feel more like a poop tank than a shark tank.
Go back and look at this list again and look at it from each side. What do the people who get a deal with a shark do very well? Are you a good shark when someone comes to you? Are you prepared when you are talking to a shark? Do you know your numbers? Do you understand when to collaborate and when to compete? Do you know what you are good at and when to say “pass”?
If a shark was analyzing your business, would they want to be a part of your business, or would they send you home without an offer? Could you handle the blunt questions and criticism? Some of you may say, “I would never go on that show.” I would say, you’re already in it.
Myron Friesen is the co-owner of Farm Financial Strategies Inc. in Osage, Iowa. He can be contacted at 866-524-3636 or firstname.lastname@example.org.