We’ve seen a lot reality TV shows but when it comes to mastering one’s entrepreneurial and negation skills, nothing beats ‘Shark Tank’. Participating entrepreneurs are given an opportunity to lay out their business proposals in front of highly successful investors, also referred to as the “Sharks”. The trick is to show off their ideas on stage and convince the sharks to invest in their business for a stake in the company. As you would expect, it’s a not easy being in the spotlight.
There’s always something to learn and most people are able to take something away from the show. This could either be experience, good advice or even a check. Let’s see what we can learn from Shark Tank and apply those tips to win negotiations.
A good product that cannot be replicated is a great product
Sharks are interested in both patented products and products which are difficult to replicate. Smart businessmen always have a way of thwarting the competition. This is very important in order to secure future profitability of the business. You have to do whatever you can within legal and ethical bounds to freeze the competition in their tracks.
Always pay attention to precious advice
There are no bounds to learning and every single business negotiation is a great chance to learn something new. It doesn’t matter if you lose the deal; try your best not to lose the lesson. The sharks will always give you their opinion and provide valuable advice even if they refuse your deal.
You probably won’t get anyone better to give you so much precious advice for free so take heed to them. Keep their recommendations and tips in mind wherever you go, don’t spend too much lying on your mistakes.
Don’t forget where your financial position is
Barbara Corcoran emphasizes how important it is to be ready for anything in her book, “Shark Takes: How I turned $1000 into a billion dollar business.” Highly accomplished businessmen are already ready before every negotiation. The sharks are always disappointed with people who have an unclear idea of their profits – especially if their guessed numbers have a large range like from $100,000 to $200,000 as it shows how poorly they knows their own business. Always be ready with your figures if you plan on showing it because no one can take an important decision from vaguely drawn out numbers.
Do your math before you enter the Shark Tank
The sharks are well versed in the art of evaluating a business so make sure the proposal that makes it to the negotiation table is one that the opposite party will take seriously because if you mess it up and the proposal makes no sense, you’ll be leaving without getting anything. If your company has yet to make any sales and you’re asking for a large sum of money offering only a small stake, you’re bound to get rejected. No one will invest in a one-sided deal where the investor gets very little if the business is a success and loses everything if it fails.
Expertise must not be underestimated
Money is important when it comes to setting up a business but don’t just settle for the money alone. All the Sharks have their own unique network and expertise which they will provide after taking a stake in your company. A Shark with networks in the industry you’re aiming to hit will benefit you more. You have to take into account your sales and brand promotion. The founder of the company M3 Girl Designs was offered $300,000 by Mark Cuban and Lori Greiner but she insisted on Robert Herjavec being in the deal before she accepted it. Considering the expertise which came from Robert, she got a way better deal although everything else stayed the same.
Analyze and evaluate your goals before the negotiation starts
A lot of entrepreneurs have ruined their opportunity inside the Tank because they were unsure of whether to sell, license or franchise their product. Vague objectives can lead you to fail acquiring an investment for your ideas. It can also thwart the business from ever taking off. Only when you are able to do something extremely well can your business excel and that’s hard to do if your objects are not clear.
Never give up, always stay hungry
When an entrepreneur overstretches the amount of money he’s looking for from an investor, the negotiations in the Shark Tank break down really fast. Cuban, one of the sharks, stated that he’s always looking for “hungry” businessmen not people looking for a ridiculously high salary. This only proves that he wants the sharks “to take care of him” so they refuse to invest in people like him.
You have to be hungry at all times and you must strive to achieve more than what you have and expand your business – it’s the only way you can get to the top. As soon as you think you no longer need to expand anymore, you will start to fall behind because the competition will only get tougher. The golden rule to smart negotiations – be bold.
Davis Miller is a business and education writer who writes articles in related niche. He has an extensive knowledge about business, negotiation and he shares them through his articles. He also writes articles for TheGapPartnership which offers workshops at negotiation.