William L. Coney Blog: The Real Reason You Should Audition for Shark Tank

shark tank Many people dream of owning their own business. There’s nothing quite like being your own boss and running an operation the way you want to.

However, this dream comes with a big cost. So, unless you’ve inherited a large sum of money or won the lottery, you’ll probably need to look into funding options for your small business.

There are many ways to seek funding, but one that seems to attract a lot of buzz is pitching to the investors on the TV show “Shark Tank.” The premise? Entrepreneurs pitch their startup idea in hopes that one of the extremely wealthy and successful investors, or “sharks,” will invest in them. At the very least, there’s potential to benefit from floating your pitch in front of millions of viewers.

But the chances of making it on the show are very slim. According to one Observer article, of the 40,000 applications the show received in 2016, only 180 entrepreneurs were able to pitch in front of the sharks. That’s less than 0.5 percent. Although those odds aren’t the best, it shouldn’t deter you from applying.

Maybe you’ll be one of the lucky few to make it on the show and land a deal, but the true benefits lie the process of preparing to audition.

The entrepreneurs who make on “Shark Tank” all have a set of achievable goals, a compelling pitch, and a handle on their businesses strengths weaknesses and opportunities. These skills helped past contestants make deals on the show, and these same skills can help you secure funding, whether it’s a shark or another investor.

Draft a business plan

Once you have some goals in mind, it’s time to make a plan to achieve them. Dreams are fine and dandy, but any investor will want to know what you’ll do to actually achieve them. You do this by showing them your business plan. Before you can show it to the sharks or any other investor or lender though, you’re going to need to make one.

Here are some components every great business plan has and things you should consider for your own business:

Executive summary: This is your time to be upfront with investors and ask what it is you truly want from them. That way readers will know from the get-go what they’re dealing with. Even though this will be the first thing investors see, it’s generally advised to write this portion last. This is because the executive summary includes a general summary of your entire business plan. You can’t summarize what you haven’t finished.
Opportunity: What exactly are you selling and who are you selling it to? How does your product or service fit into the existing marketplace? Defining the problem you are solving for your customers is crucial for your business success. If you can’t pinpoint a real problem that your customers face (that your product solves), then you might not have a viable business concept.
Market analysis summary: This section of your plan should describe who your target market is—your ideal customers. Use this section to talk about your customers’ needs and how you’ll reach them. This is also where you’ll want to talk about who your competitors are and why you think there’s room for you in the market.
Execution: This section of your plan should include your marketing and sales plans and functional or operational details the technology or tools you’ll use to run your business. It’s also where you’ll want to put your goals, the milestones that are going to move you toward your goals, and how you’ll measure your success.
Team and company: Especially in the competitive funding landscape, you’ll sometimes hear that investors are looking for exceptional teams, rather than amazing ideas. You’ll need both to be successful, but don’t underestimate the importance of telling investors about your team’s special qualifications and experience. Use this section to describe your current to and outline the roles that you plan to hire. Also mention where you’re located, your legal structure, and a brief company history if your organization is up and running.
Financial plan: Investors will want to see your revenue and sales forecast, expenses, projected profit and loss, and cash flow, and projected balance sheet. Even better if you can provide charts and graphs so that you can make it easy for investors to visualize your financial plan.

Set goals for your company

Some people like to take the more spontaneous path and wing it, but it’s guaranteed they haven’t appeared on “Shark Tank” or set themselves up for long-term success. By creating a set of goals your business can strive for, your company will have the direction it needs to take the right steps to grow and prosper.

It helps to imagine where you want your company to be in five or ten years. What do you predict yourself achieving? How do you see your product or service making a difference in people’s lives? Open your mind to all the possibilities, good or bad.

From there, think about setting milestones to help you stay focused and to function as a kind of barometer to help you know whether you’re on the right track. Good milestones should state your objective (think mini goal), who is responsible for it, budget information, and a concrete due date.

Perfect your pitch

In order to get onto “Shark Tank” or to interest other investors, you’ll have to pitch to a series of people before you can even talk to one of the sharks.

Mastering your pitch is integral to securing funding. When you know your goals and business plan backward and forwards, then crafting your pitch is already halfway done.

The sharks aren’t just looking to invest in a business, they’re investing in a person too. Tell them your story and how you came up with the idea for your company. Showcase your personality as much as you can to see how compatible you are with the investors.

Any time you meet with an investor, do your homework on them first. Make sure you know and understand the types of businesses they’ve funded before. That will be a good indicator of whether they’ll consider your particular product or service.

Keep your pitch short and to the point. If you cannot concisely explain what your company is and what you plan to do with it, it will be a sign to the sharks and any investor that your business isn’t organized or stable. Stick to the essentials and use plain language so that anyone from any background can comprehend what you’re saying.

Be sure to practice your pitch several times, and get feedback from someone you trust. Think through the types of questions you’re likely to get when you’re finished—and plan what you’ll say if you get a question that you don’t have an answer to so that you’re not completely thrown off.

Talk about your competition and the successes your company has experienced. Don’t be afraid to show the numbers to back you up either. Just make sure they’re accurate before including them in your presentation.

If it’s possible, show your product to the sharks or at least a prototype or mock-up of it. Showing your product or service in action can be the difference between a yes or no. If you will be able to give a slide presentation, make sure that it’s free of errors and has a clean design. If you’re not sure where to present, Bplans offers a free downloadable pitch template to help you get started.

Even if you don’t get on the show or make a deal with a shark, having worked through your business plan, mastered your pitch, and thought through your milestones and goals will put you ahead of the game in your effort to secure funding.