Business Lessons Learned From Shark Tank

Small business owners call learn a lot from the ABC television show "Shark Tank".

The program centers on entrepreneurs who believe they have the next great idea or simply want to take their existing company to the next level.

In order to bring their dream to fruition they seek a substantial investment.

Most are looking to sell a small piece of their firm for a large capital infusion. Others are willing to part with a large percentage of company ownership.

Who gets what and how much is left in the hands of "The Sharks". These are millionaires and even billionaires who have achieved great success.

The Sharks built their own companies from scratch. Collectively they are well-versed in a variety of business sectors from clothing to high-tech to real estate to retail to TV infomercials.

Ideas with the greatest potential create a sort of feeding frenzy among the Sharks. They will bid against each other and offer different investment packages hoping to entice the entrepreneur into a partnership.

Those entrepreneurs who accurately and professionally can state their case, and have the products to back it up, can receive thousands if not hundreds of thousands of dollars. In addition they also get the knowledge and leadership their partner Shark can provide.

The entrepreneur who fails to make a persuasive argument is made to look foolish and is often sent home with no investment.

Several business lessons can be gleaned from swimming with these sharks.

1. Know your marketplace. Nearly all successful companies have learned to fixate on a target market. They understand the strengths and weaknesses of their products or service. They also have a good feel for their competition and know the parameters of maintaining a steady and solid growth pattern.

I have worked with dozens of small business owners over the years and can say that not all entrepreneurs share that vision. Many small firms launch a product or service hoping it resonates with a select group of buyers and then grows on its own.

Often a few items are sold and a plateau is reached. Many times the business owner can eke out a living but lacks the funds and insight to take the company past the launch stage or is always in survival mode.

Entrepreneurs who secure investments on Shark Tank understand their marketplace. They know the upside and limitations of their product. These business owners have found a niche and realize that with a little help and some cash they can double, triple or quadruple the size of their firm.

2. Know your message. This is marketing/PR 101 but many small business owners are unable to create a sales message that successfully connects with their customer base.

They fail to communicate the real benefits of their products in a few short sentences and are unable to differentiate their offerings from competitors. Fairly or not they become perceived as a "me too" company falling in-line with others who sell basically the same goods and services.

The Sharks reward those business owners who can passionately present their products in a brief concise manner, poignantly demonstrating how these products stand out in the crowded marketplace.

3. Remain flexible. Entrepreneurs often fall in love with their products and stay rigid in their thinking. They focus on one specific product and market, and continue hammering away at selected customers for months if not years. When the marketplace fails to respond they blame their advertising or the economy in general.

The Sharks will often envision a new use for a particular product. They tell the creator he or she may be missing out on an entire market niche. It is common for them to tell the business owner to make a few tweaks to the item and then rebrand it before bringing it to market. If the entrepreneur is willing to do so the Sharks are likely to invest in the new approach.

Business owners can learn a lot from watching Shark Tank. The keys are to watch the interaction between those seeking funding and the millionaires who are ready to invest. Then analyze your own company to ensure you have the right mix of products to be positioned for long-term growth.