Shark Tank is now associated with a group of entrepreneurs looking for good ideas to invest in. Since it first aired in 2009, the hit TV show has made Shark Tank a household name.
The basic premise is that small business owners and hopeful inventors put their ideas and business savvy to the test by presenting their products to a group of experienced entrepreneurs. These are the Sharks, giants in their fields, self-made millionaires looking for the next big thing to invest in and grow their bank accounts in the process.
Other times, the small business/ itself needs to change, adapt, or “pivot,” as the Sharks describe it. If something is not working, do not double down; change it. Instead, adapt the idea to fit the market’s needs, do your research, and make decisions to grow the business. Sometimes, this will involve changing the whole business.
With proposed ideas ranging from ingenious to ridiculous, it’s no surprise the show has been going strong for 13 seasons.
In all that time, the Sharks have shared a variety of helpful pieces of advice for starting, managing, and growing small businesses. Here are the Top 5 Pieces of Financial Advice from the Shark Tank.
1. Do your homework
When making money decisions, planning a big purchase, or even contemplating investing, it’s always important to know what you’re getting into.
But, unfortunately, one of the worst decisions you can make when it comes to money or finances is to make uninformed decisions.
- Are you thinking of investing in the stock market, applying for a credit card, or making a big business decision? The first and arguably the most crucial step is to do your research.
- How will this affect your personal/business finances? How risky are the options?
- What is the long-term impact?
- Will this help grow your business or fill your wallet in the future?
These are all vital questions to ask. Each answer will give you a better idea and a clearer picture of the working situation.
Doing your homework is also a great way to avoid any unexpected issues that may come up. You can identify and plan to avoid or prevent some occurrences with the proper research beforehand.
2. Be prepared
Whether it is your finances or the finances for a business, being prepared for what may come is one of the best pieces of advice you will find. You will not know when something will go wrong, and you will not know what will go wrong and how.
The only thing you can be sure of is that it will happen eventually, sooner or later.
For personal finances, setting up an emergency fund or a “Rainy Day” fund is a great way to prepare yourself for the unexpected. Setting aside a little money from each paycheck or occasionally adding to this fund throughout the month can do wonders for you.
Whether it’s a trip to the hospital or fixing a leaking roof, having that extra capital to help cover the cost will ease the stress on you and your wallet.
3. Diversify
If you’ve ever heard the phrase, “Don’t put all of your eggs in one basket,” you’ll understand this next piece of advice. It’s not the best idea to invest all your money in one project or focus your finances on a single account.
If that one thing does not work out, the investment goes belly up, your bank information or credit/debit card is stolen, you stand to lose everything if you’re unlucky.
On the other hand, making a handful of smaller or medium investments is a great way to keep your portfolio stable, as a single bad event will not ruin your finances.
The same goes for bank accounts. Having a separate personal and investment account can do wonders for organizing and safeguarding your money. But be sure not to create too many! Applying for many credit cards is an excellent way to accumulate debt, and it gets hard to keep track of everything.
4. Pivot
One of the most prevalent pieces of advice given by the Shark Tank experts is a single word, “PIVOT.” It is a golden rule for small businesses. It boils down to this: Change it if something is not working.
When the Pandemic hit in 2020, stores were shut down, and many small businesses fumbled and struggled to stay afloat.
However, many found astounding success by changing how they did business to fit the market climate at the time. For example, if people could not find their products in stores, they needed to reach customers online.
This same advice applies to your current job situation, investments, or financial decisions. If you are not getting the desired results, change and modify how you go about things to move toward your goals.
A small thing you can do is to cook your meals more. Sure, eating out or ordering food is convenient, but it is also expensive. Cooking five out of the seven dinners you have in a week can do wonders to save money, as well as improve your cooking skills.
5. Invest like a Shark
If you’ve ever watched an episode of Shark Tank, you know how the energy in the room changes when the Sharks are interested in a product or business.
But you should also know how the energy leaves the room as soon as someone says the words “I’m out.”
The Sharks did not become millionaires by making bad decisions; they recognized the importance of savvy, informed investing, and playing to their skills.
When a new business enters the Shark tank, they are usually asked the same set of questions by the Sharks. The Sharks ask questions for the contestants and themselves.
These are not scripted, standard questions; they are crucial requests for important information. The answers that contestants give to these questions can make or break their chances of getting a deal. You can ask these questions yourself the next time you consider your finances or make a purchase/investment.
How can I contribute to this?
When they invest, the Sharks become business partners, helping manage and run the business. If they don’t feel like they could make an impact that would make the investment worth it, they will pass.
What can I gain from this?
The Sharks are always looking to do one thing, make money. That’s the whole reason that they are on the show.
If they do not feel like they can make back their investment and continue to make a profit past that, they usually do not make an offer.
What are the risks?
On top of weighing the rewards, they also consider the risks. Every investment has risks. If the venture or project does not work out, flops, and goes belly up, they stand to lose their investment with little hope of getting it back. Too high of a risk for the reward? They’re out.
Is this something I feel strongly about?
Sometimes, the Sharks will ignore the first three questions if they feel strongly enough about a product or a goal for the business. A shark may overlook the risks if it’s an area they excel in. They are confident in their business and abilities.
Image by: [Tumisu]