28 Mar Why We Love Shark Tank
We have a few favorite shows that we are enjoying lately – Parenthood, Downton Abbey, and we’re even getting into Friends now that it’s on Netflix. One of our most favorite shows, and has been for years, is Shark Tank.
For us, it has everything: conflict, challenge, hopeful stories, and just the right amount of drama. Most of all, we love that it gives us access to some of the premier investing minds of our time. In watching Shark Tank, you learn what wildly successful businesspeople are thinking about when they are weighing whether to invest in any given venture.
You may never have any desire to actually go on Shark Tank, nor have the type of business to go on the show. But watching how those investors evaluate businesses they’ve never heard of can give you insight into the kinds of things you should be thinking when you self-evaluate your business.
What are some of the most common financial questions they ask?
– How many have you sold? What was your revenue last year?
– Have you made any money? (What was your net profit on that revenue?)
– What are your projected sales?
– What’s the model here? (If you’re not profitable now, how are you going to become profitable?)
– What are you going to use the money for? (If you had an influx of cash, what are your priorities to go to the next level?)
– What does it cost to make and how much do you sell it for? (What is your margin on the product/service?)
When we begin to think in these terms, we can evaluate our businesses much more effectively. So, based off of what we know from Shark Tank, what are the questions you should answer for yourself? Start with these:
1) How many _______ have I sold in the last year?
2) What was my total revenue last year? How much money/net profit did I make from that?
3) What are my projected sales (in units and dollars) for the next 12 months?
4) What does an ideal year look like for me, in terms of how many units sold to generate how much revenue?
5) Are my margins good enough to be able to scale this and really make money?
6) If I had $100,000 to invest into my business right now, what would I do with it?
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