Starting a business can be hard, from registering your company to financing your new venture. Fortunately, American Financial Solutions has you covered. Call (888) 864-8548 to get connected with one of our certified counselors, who can help you navigate the tricky landscape of managing debt and maintaining good credit.
The popular TV show “Shark Tank” also offers some valuable lessons in regards to using your finite monetary resources wisely. Here are their top five tips and tricks for entrepreneurs, but they may apply to your finances or life as well.
10 Second Rule
You should be able to articulate your business idea in 10 seconds or less. On “Shark Tank”, the sharks (investors) don’t have time to listen to long stories – they want to hear a solid pitch right off the bat.1 If you don’t have a firm grasp of the concept of your business, focus on clarifying it. No one will understand your purpose as well as you do, which is why it’s crucial to simplify it for potential investors and customers.
This is a lesson you can probably apply to other aspects of your life as well. We all have a friend or family member who struggles with the concept of brevity, and you likely know how frustrating that can be for an audience.
Focus on the Dream, Not the Sales
Sales don’t matter if your product doesn’t grab an audience. “Scrub Daddy” founder Aaron Krause struggled to reach $100,000 in sales before pitching his sponges on season 4. Investor Lori Greiner took a chance on him, and his company has now brought in more than $75 million in revenue because people like his product.2 If you’re passionate about your product or service, it will show investors that you’re willing to make sacrifices to ensure your business succeeds.
This lesson holds true in many aspects of life – people appreciate sacrifice and effort. Employers often hire people who have a degree in specialty that isn’t necessarily strongly correlated with their business because earning the degree itself tells them about a person’s ability to commit to a long-term goal and achieve it.
So, you have a product or service people like – that’s only part of the equation. When you’re trying to sell your business idea to investors, presentation matters. If you’re prepared to explain your business and go above and beyond with samples of your product, props or even a company jingle, you’re more likely to attract investors because your business appears well researched.
Don’t Get Too Far Ahead of the Competition
If your product or service is light years ahead of the competition, you may think you’ll have it easy. That’s not necessarily true. If your idea is so innovative that customers don’t understand a need for it, you’re less likely to nail your pitch. Investors are also wary of risky proposals geared toward a small percentage of buyers, and only 23 percent of these “niche” pitches have been successful on “Shark Tank.”3
Keep Your Cool
Once you begin negotiations with investors, don’t let your guard down. Disagreements during the negotiation process are common, but it can be very easy to lose your cool. Don’t take offense if you’re asked questions about pricing strategies, licensing or other specifics. If you remain professional, you’re more likely to close a deal and get your business off the ground.4
If you are planning to apply for a home loan, this is an important thing to remember. Every lender will want to delve into your finances to determine your risk as a borrower. It’s just part of the process. Fighting it won’t make it any easier or faster.
Becoming a business owner helps you take control of your financial future – now take the next step by working with a small business owner counselor at American Financial Solutions. Your coach will provide you a customized financial plan that will teach you how to stabilize your business through managing your cash flow, insurance, taxes and more.
Call (888) 864-8548 or visit us online to begin your path to financial success.