A special excerpt from the upcoming eighth edition of Entrepreneur Press’ ‘Start Your Own Business: The Only Startup Book You’ll Ever Need,’ available for pre-order now.
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The following is an excerpt from Entrepreneur Press’ Start Your Own Business: The Only Startup Book You’ll Ever Need, 8th Edition. Pre-order your copy today here!
While many business owners have been re-tooling and jump-starting their businesses as we collectively work our way past the pandemic, many up-and-coming entrepreneurs are once again finding their footing and taking steps to start a business.
The basics of business remain the same: Wow customers with products and services that meet their needs, stay abreast of what the competition is up to, try to be one step ahead of them, and give the people what they want. Today, however, the ways and means of doing business are changing at an accelerated pace, and it’s important to stay ahead of the learning curve, whether you are trying to find investors, hire the best people, create a dynamic business culture, go digital with your advertising or hire influencers to effectively market your company.
The eighth edition of Entrepreneur’s comprehensive, best-selling Start Your Own Business guide entertains new topics — such as those mentioned above — along with a treasure trove of information on when, where, why and how to start and run a successful business.
In this excerpt we discuss what’s really worth heeding from the investors on Shark Tank. — Rich Mintzer
By now, nearly everyone who has dreamed of becoming an entrepreneur has seen at least one episode of Shark Tank. Over the years many hopeful small-business owners have pitched their products and ideas to a panel of “shark” investors, led by business leader/entrepreneur Robert Herjavec and billionaire Mark Cuban. The sharks have invested in more than 225 businesses, and they’ve made many additional offers on deals that were never closed.
Just being on the show can boost the presence of a small business. But pitching investors in real life isn’t like the pre-screened and rehearsed process you see on TV. However, there are lessons you can take from the demands the sharks make of the entrepreneurs — ones that will be useful in securing investors the traditional way. Here are six big ones.
1. The 10-second rule
The first 10 seconds of your pitch will set the tone and the impression investors have of you and your idea. Practice, practice, practice.
2. Be clear and concise
People who fail to get money or attention from the sharks typically lack clarity about their ideas and real conviction that they can succeed. Project clear goals, plans and projections, and make sure your passion comes through.
3. Know the problem and the market
The sharks are notorious for homing in on the problem a business is trying to solve and how big that problem is. That helps determine the likelihood of success. You don’t need a product that’s going to solve a worldwide problem to have a good idea. If your business solves a problem that has a significant market and you have knowledge of that market, and a means of reaching them, you can make a strong impression. Be clear when you speak to investors about this.
4. Do the math, and do it well
Know the costs of making your product or running your business compared to the profits. Understand and be clear about your margins. Know the overall market size and a realistic share you can capture. Know what you plan to do with an investor’s money. Commit all this to memory — and be able to back it up.
5. Be prepared to answer questions
Review your business plan, and be prepared to answer any possible question they could ask. Whenever contestants on Shark Tank fumble their way through an answer, the sharks start circling, and you know that contestant is most likely heading home without an offer.
6. Be willing to listen and learn from feedback
On Shark Tank, the sharks almost always offer smart lessons, although they’re often in the form of criticism or tearing apart (as sharks would) an idea they deem unworthy of an investment. If potential investors criticize or decide not to invest, listen for the advice in that criticism, and don’t be afraid to ask for feedback about what would have changed their minds. Use that to improve your pitch.