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.

Shark Tank Logo

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:

  1. Putting too high a value on their business
  2. 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.

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