The television show, Shark Tank, has rapidly become “must see” TV in my house. If you’ve never seen it, it’s worth tuning in to watch some of the principles of business in action. The premise involves entrepreneurs with formulated business plans and/or existing products, pitching their companies to self-made multimillionaires whom they hope will invest in their businesses.
There are truly no limits or boundaries to the creative business ideas that come from the entrepreneurial spirit. Viewing the show for that inspiration alone is enough, but the real learning experience comes from seeing the exchanges between the entrepreneurs and “the sharks” (investors).
If you’re starting your own business, and you don’t know the answer to every single potential question, you may not get eaten alive by sharks, but your lack of knowledge about your business could come back to bite you. You need to be as well-informed as you possibly can about the company you are trying to create. You need to be able to tell anyone, at anytime, and in a limited amount of time, all about your business.
Highlighting all of the unique features and assets is a good start, but a better area to focus on is why people need those unique features and assets. Be able to point out how your customers can benefit from your product or service, and how it can help solve an existing or potential problem. Benefits are what sell products and services, not features alone.
This is also essential information if you intend to pitch your business to potential investors. At any given time, you should be able to field such questions as, “Why does the market need this?” “How much profit can you make per single unit sold?” “What’s in it for me?” While the first question addresses the benefits of your service to its audience, all three are really all about the money. If you can’t define the benefit, the audience won’t buy it. If the consumer does purchase your product, how much of a profit can the investor expect to make after costs are factored?
So, if you are considering investors, you do need to understand the money aspect of your business. It may not be your preferred area of expertise, but you should have a firm enough grasp of expenses, customer cost and overall profit to speak truthfully and intelligently about it. Mere speculation is akin to guessing in the eyes of an investor.