How The Sharks can eat you...
If I wanted to relate finance in an interesting matter with entertainment, and make it fit along with the thematic if this blog, than I would definitely talk about "The Shark Tank". I chose this episode because there are a lot of things we can learn in terms of business planning. It’s like an episode of “Things you should NOT do.” No matter in what field your business may be, there are some keys of administration that are in all business categories.
I think what happened to the owner of “The Ave” was some expressions he made. Part of planning is knowing what you would do in times of adversity which Nick, with comments he did, didn’t represent he was willing to put much more effort into his company. In a new growing business you must be active. He said things that leaded The Sharks into not trusting his commitment with his business like “he wasn’t in the store anymore” and “he was living the LA life.” These comments could represent that you only want money to “live the good life”. To real business men, especially investors, you cannot say things like this because, even though they know it’s all about money, they want to make sure they will invest on someone putting all the effort into gaining even more $$$. They want to feel that the risk they are taking with investing is going to be worth it. When presenting yourself to investors you must be careful with how you express yourself, maintain your humbleness and make them feel their money is safe with you...Sharks don’t have time to waste and are definitely not going to throw their money away.
Phrases like “A little too soon” and “Way too early”, where the Shark's concern with “Barkem’s to go”. As soon as I saw his presentation I thought to myself the same thing. I don’t think he dedicated a lot of his time in planning his business plan. He had the idea without thinking through all the rest of the resources it would need to move it along to become a real business. Good Ideas can crash for not having dedicated into them, time of investigation, planning and marketing. Before having asked for money, he should have at least done more investigation, surveys and visualize where did he want to take this product. You should have actual results to back up your point. For me it looked as if he was just making a hypothesis about his product.
“Your trying to solve a problem that doesn’t exist.” - says Barbara. I agree, just because it was a problem for you, and you created something to make your life easier, doesn’t necessarily mean it is a problem for everyone else.
From the "Brewer’s Cow" we can learn how in a business presentation you have to demonstrate you know your product. How much does it cost you to make it? How much are you selling it for? How much are you distributing in what timeframe? And most important, how much are your sales? These “ice cream makers” didn’t have any basic calculation based on their sales, expenses and income. As Robert tells them, “you got to know your numbers...there are certain things in every business you need to know everyday and that is what do you need to do in order to break even.” It seems as if they wanted the investors to do all the mathematical work for them. They are investors, not accountants. I think it is every business person responsibility to know what they need and how they can get there. These are basic questions any investor will asked you...they want to know how and why did you come up with the amount of money you're asking for. So be prepared to give them the reasons. Also, I must include, If the presentation is going to between more than one person, than they should to take turns of who is going to speak so it looks organized and prepared.
Unfocused:
“Go Go Gear”, here is a good idea, with good intentions, and a specific market that was brutally managed because of "dreaminess". They where focusing more on where they wanted to go, rather where they were right now. Dreaming about the future is good, but you have to plan how you're going to achieve it, in order for it to come true. Sometimes our emotions can unfocus our path towards our goals. We can't let them get to us, neither good or bad emotions. For me, this was a great idea fro the fashion industry, and as we can see for Daymond also. But, the "Go Go girls" seemed desperate, so he notice he could take a great deal out of them. You have to know the value of your idea in order to be able to protect it and demand money over it.
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