They walk in the room confident that they have a great idea and that at any moment one of the five Sharks will make them a great offer that launches their business into the stratosphere. It can be amusing to follow the pitch and imagine that we’ll see these products on future shelves. Even more amusing are the sidebar conversations, and sometimes the teachings, the Sharks provide the budding entrepreneur.
Sadly, it doesn’t usually work out the way the product presenters imagined.
The reason is that the business they present is not nearly compelling enough. Having a great idea is only the start; you need to actually be able to turn it into a profitable business with enough margins to provide sustainability and growth.
Or as I like to think of it, a commercial profitable enterprise that works without you.
So what are some of the key questions from the Sharks?
- How much money do you make on each sale? In other words, what’s the predictable margin?
- How are you going to find customers? In other words, what’s your marketing plan?
- How will you bring your product to market? In other words, what kind of upside capacity do you have to support growth?
- How will you keep out the competition? In other words, what’s your niche? Restated, what’s your Unique Selling Proposition that only you can claim so that no one else can compete with you, as well as, your first to market advantage? Can you even make this Amazon proof?
- How will I get my money back out of it? What will this business or product line look like when you are finished building it? In other words, is there an exit strategy?
Good questions for any entrepreneur to ask.
Through the years of meeting and coaching business owners I’ve met plenty who are great at what they do. Sally is a terrific caterer, Sam is the best plumber around and Ron has the family ice cream recipe down pat. They love what they do and customers seem to be around. The problem is that the job of the entrepreneur is to grow the business and the team, not turn the wrench.
When the Sharks take themselves out, often times it is because they are not excited, or passionate, about the business. And that’s the secret sauce for any entrepreneur to be successful. Passion about what the business does. Passion is what gets an entrepreneur through, around or over the speed bumps that always show up. Get this right and you are off to the races and the clarity around your future gets even more exciting, because success begets even more success.
So here are few action items to consider before you open a new venture or bring on a new product.
- Be sure the passion is all about growing and sustaining it, not doing it.
- Get a handle on all the numbers, not the activity.
- Know ahead of time when the time is right to turn over your control to someone else.
- Plan now for what this will look like when you finish building it and how you might sell it or transfer it to your kids
Take action today on getting all the details before your big pitch and then take a dive with the sharks. Now go Run a Lap! Business is fun!