How Would You Do in the Shark Tank?
The American Dream of building and growing a business is alive and well. In fact, you can see it played out every Friday night on “Shark Tank” – a reality TV show with, at least, some redeeming value.
As avid fans, my wife and I are glued to the TV watching as each hopeful small business owner stands in front of a panel of five wealthy entrepreneurs/investors (“Sharks”) and pitches their dream. I’m amazed at how many owners make the same two mistakes:
- Putting too high a value on their business
- Putting too low a value on others impact on their business
One episode that illustrates these two points aired on April 13th (click to watch) featuring a winery owner with a proprietary bottling process (he’s the only manufacturer in the world to bottle wine-by-the-glass). He used his bottling process as a differentiator to sell his product into national chains—growing his vineyard’s sales to $5M. With orders outstripping production capacity and guzzling all available cash flow, he went online slots into the Shark Tank to raise $300K to increase production. And, most unusual, this was his second appearance on the show.
On his first visit one of the investors – Kevin O’Leary–saw the billion dollar opportunity to license the bottling process to the biggest wine-makers in the world and he offered the owner $600K for 51% stake in his Intellectual Property—the bottling process. The owner walked away because he couldn’t grasp the thought of separating the business. Now he’s back with the same pitch for a second try.
To read the rest of this blog entry, please click this link taking you to The Small Business Lifer.