Shark Tank Jump Start Your Business: How to Launch and Grow a Business from Concept to Cash (4 page)
Authors: Michael Parrish DuDell
Many business hopefuls share Mark’s point of view and are hungrily searching for alternative options. Some are even creating their own educational opportunities. With more access to information, media, and community online, creating a DIY path can save the entrepreneur precious time and money.
But choosing that route requires a tremendous amount of dedication and discipline.
Below you’ll find five ways to help kick-start the learning process. Even if you choose to seek a more traditional education, these tips will come in handy.
Read everything:
No experience in accounting? Unsure of how to build a marketing campaign? While this book is a fantastic start, it should be just that—a start. Commit to reading a minimum of two business books by trusted experts each month. You should also begin subscribing to business-related magazines, like
Fast Company
,
INC.
, and
Entrepreneur
. Publications like these provide a real-time snapshot of what’s happening in the small business community—a valuable resource for anyone interested in becoming an entrepreneur. For more of this type of material, including a list of recommended books by established business voices, check out the Tools and Resources section at the end of this book.
Explore digital tools:
Getting in the habit of reading new material every day is important, but your research shouldn’t stop there. From videos to online courses, the Internet is full of incredible tools for the blossoming entrepreneur. In fact, the greatest challenge is the abundance of material, not the lack thereof. To help focus your search, start following some of your favorite business authors and publications on Twitter and Facebook. Take note of what they’re recommending on a daily basis. Try to commit an hour or two each day to finding valuable digital content. Download apps that can help boost your productivity. Sign up for newsletters. Listen to business podcasts. While the exploration process can feel daunting at first, over time you’ll begin to see just how much this information can help you grow.
Invest in community:
The value of community cannot be overstated, especially when trying to launch a new business. If you’re comfortable with social media, dive right in and join the conversation. Most entrepreneurs are nothing if not boisterous and outspoken; you’ll have no trouble finding these rabble-rousers online. But don’t spend all your time in front of a screen. You should also seek out offline community as well. Explore local meetups and small business associations, attend trade shows and conferences, and reach out to other entrepreneurs in your field. If you live in a major metropolitan area, you may find it helpful to join a co-working space—a shared working environment that houses a variety of companies. If you’re going to create your own educational experience, you must be even more proactive when it comes to building community.
Get some experience:
Most entrepreneurs need all the help they can get. Try to find a small startup that interests you and see if you can spend a few hours each week helping out. It’s possible they won’t be able to pay you, but don’t let that be a deterrent. Think of it as an internship. If you can’t find an opportunity, launch something small on your own—a starter business. If you’re crafty, sell something on Etsy. If you have stuff in your house to get rid of, create your own eBay store. Start something small that requires a minimal investment. This will help prepare you for what it’s like to run a larger operation. Experience is the greatest teacher of them all.
Find a mentor:
We live in a culture that places tremendous value on independence and self-reliance. But knowing how and when to ask for help, especially when it’s hard, is one of the most valuable lessons you can learn. A great mentor can play an influential role in your personal life and the life of
your business. Seek out a relationship with someone in your community whom you respect and trust.
| “Technology has really changed education by allowing more people to get information quicker than ever before. It’s no longer necessary to always take that two-, four-, or eight-year course. You can learn so much on your own.” |
Whether you get an MBA or decide to build your own curriculum, be sure your path includes the right combination of knowledge, experience, and connection. A well-rounded education requires all three of these priceless elements.
The final piece of the puzzle in deciding whether entrepreneurship is the right fit for you is assessing the current state of your personal and professional life. In other words, before you can get your
business
in order, you must get your
life
in order. But what exactly does that mean? How do you possibly prepare for the unknown? It starts by examining three key areas:
Time:
Did you just undertake a massive new project at your day job? Do you have a plethora of outside commitments that limit your downtime? If you want your company to succeed, it must be your primary focus for the first few months, if not years. Every free minute should be spent building and growing the business. This isn’t to imply that you should ditch all your other responsibilities; it just means that your company must remain front and center.
If you generally have a hectic schedule, you may find it helpful to schedule “business-building” time in your calendar, as you would a meeting. And don’t just pencil it in; literally schedule nonnegotiable “business development” hours. If you find yourself with less than ten hours a week to dedicate to your business, you should probably hold off until your schedule is a bit more flexible. Time is your most valuable resource, and your new business will demand the majority of it.
Finances:
As you’ll soon learn, starting a business may require a sizeable personal investment. If you’ve decided to quit your job or aren’t currently working, you must be even more careful with your money. Try to get your overhead—such as rent—as low as possible and reduce your discretionary spending as much as you can. There’s no reason to sugarcoat it: the first couple years will likely be very financially challenging. Be realistic with yourself about whether or not you’re really in financial shape to start a business.
Relationships:
Starting a new business is like riding a roller coaster, with ups and downs coming toward you at the speed of light. Having a strong support system can significantly reduce the anxiety and stress you’re bound to encounter. But it’s even more important to pay close attention to your weak
and tumultuous relationships. The last thing you need is for unsupportive people to halt your progress. The journey you’re about to undertake is a challenging one. You need people by your side who will be encouraging and reliable, even in—especially in—difficult times.
| “The reality is that when you’re starting a business, you have one master to serve—and that’s your business. There is no balance. And you have to be honest with yourself. If you’re not prepared to make that sacrifice and commitment, don’t do it.” |
SETTING SMART GOALS
Regular, strategic goal setting is one of the best habits you can adopt as an entrepreneur. When you start setting goals, the mystery behind success begins to disappear.
As Daymond John says, “Goal setting is like a motto, a hook, or a phrase that’s always on your mind, just like a jingle you’d remember from a commercial. The things you do, say, or hear in your everyday life will subconsciously trigger you to act out your goals and move closer to the desired target. A lot of work and thought processes go into goal setting, but once you get the hang of it, it will come to you naturally.”
When setting goals, you may find it helpful to use the SMART method, which was first developed by author George T. Doran in 1981.
Using this method, goals should meet the following criteria:
Specific: Who? What? Where? When? Why? In order to create truly achievable goals, you must learn to get as specific as possible. If you desire wealth, for instance, your goal shouldn’t be to get rich but to make a specific amount of money in a certain period of time.
Measurable: If you can’t measure it, you’ll never be able to achieve it. When setting goals, it’s best to identify short- and long-term measurements of success along the way. This way, you can track your progress in real time.
Attainable: There’s nothing wrong with dreaming big, but make sure your goals are somewhat attainable. If you want a million dollars and you only have $100 in your bank account, it’s highly unlikely that you’ll be a millionaire by next month.
Relevant: Achieving any major goal takes a lot of work, so you must make sure your goals are relevant and important. Don’t forget to zoom out a bit and take a look at the bigger picture. Do your short-term goals set you up for long-term success?
Timely: Goals can only become accomplishments when given a target date. Be sure to assign each of your goals a specific due date, and don’t allow yourself the opportunity to waver. A time frame will help create a sense of urgency around the goal and push you that much further ahead.
Write down some of your short- and long-term goals and begin assessing them using the SMART method. Are you right on track, or do some of your goals need a little fine-tuning?
YOUR BIG IDEA
Business owners can be called a lot of things: job creators, entrepreneurs, founders. But no matter the title, they all share one single, underlying goal: the desire to solve a problem. Whether you’re inventing something new or simply developing a new approach, a great business starts with a great solution. You need only look at a handful of companies featured on
Shark Tank
to see this principle in practice.
SURFSET
Fitness, Season 4, Deal made with Mark Cuban
Problem
: Surfing is a fantastic total-body workout, but not everyone has time for it or access to the beach.
Solution
: SURFSET Fitness workouts allow anyone to get the benefits of surfing by using a free standing SURFSET Fitness board designed to mimic the movement of its aquatic counterpart.
Cozy Bug, Season 4, Deal made with Daymond John
Problem:
Kids outgrow clothes quickly, which can end up costing parents an arm and a leg.
Solution:
Cozy Bug products are designed to grow with the child, allowing clothes to be worn for many years and saving parents time and money.
Scrub Daddy, Season 4, Deal with Lori Greiner
Problem
:
Cleaning a variety of products often requires the use of more than one tool.
Solution
: The Scrub Daddy sponge uses a special foam that changes texture in different temperatures of water, allowing it to serve as the perfect cleaning instrument for any task.
So as you can see, a great business starts with a great solution. Below you’ll find ten questions designed to help effectively evaluate your idea. If answered thoroughly, these questions should provide the clarity you’ll need to advance to the next stage of building your business.
Don’t think too hard here. Simply identify the problem and briefly explain the solution your business will offer.
Most likely there are other people trying to solve the same problem that you are. That’s not necessarily a bad thing. Watch closely and study each part of their business. You might discover that by making only a small tweak you can capture a large piece of the market.
Assuming you will in fact have some competition, you must next identify how you’ll differentiate your product or service from others. What are you bringing to the table that’s different and/or better than what’s already out there?
Maybe you’ve come up with a brilliant new way to teach corporate executives how to whistle. Great! But do enough people want or need that? Probably not. Before you go through the trouble of starting a company, you must first uncover whether there’s a genuine desire for it in the marketplace.
Although there must be a market for your business, it doesn’t have to be huge to achieve results. Plenty of companies do well by targeting very small, niche consumer segments. To discover the size of your market, first gather data on how many people already use your product or service—you can easily find this type of information online. If you’re selling dog food, for instance, do research on how many dog owners exist in the U.S. Next, you’ll want to eliminate consumers who don’t apply to your business. If your dog food is especially designed for small dogs, all pet owners with large canines are
out. Finally, try to estimate how much of the market you can capture based on your size and marketing abilities. This last step is the toughest because it’s the most subjective. You may find it helpful to look at annual sales of your competitors. How much of the market do they already own?
This may be a tough question to answer at this point in the process, but it’s still good to consider. If you’re planning to open a retail store, for example, you’ll need significantly more capital than you would to start a consulting business. Think hard about the costs associated with launching your business and start tallying up the numbers.
Does your business require permits and licenses that take months to secure? Do you need to raise substantial capital before you even begin? Developing a solid time frame will provide the perspective you need to make bigger decisions later.
Most likely, you’ll start building your business on nights and weekends while you work toward proof of concept. But even that requires certain personal and professional adjustments. Think about any changes you may need to make to be more successful.
Do you want to make millions of dollars or build a small, modestly sized family business? Are you looking to sell your
company quickly or do you want to create a business that can last a lifetime? The best way to fast-track success is to declare it from the start.
What if you walk away right now and don’t pursue this idea? What will happen, or not happen, in your life and the lives of others if you close this book and go back to what you were doing before? This powerful question can sometimes be the defining factor for an entrepreneur.
But is starting a business really all about solving a problem? What about passion? Shouldn’t it play a role in what kind of company you choose to start? That’s a complicated question. Being passionate about your work is important, and you certainly must love your product or service. But there’s a major difference between being passionate about your business and starting a business based on a passion.
Passions shift over time, and building a company around something so fleeting can be unwise. What’s more, passions don’t always translate into businesses—both operationally or financially. Loving art and owning an art gallery, for instance, are two very different things. Likewise, taking pleasure in regularly
cooking for friends and family doesn’t mean you’ll experience that same joy if you own a restaurant. Passion is only a single ingredient; it’s not the recipe.
| “There are really only two questions to ask when evaluating your business idea: Is there a real need for the product and are enough people willing to pay for it? And if it’s been done a million times before, you also have to ask whether you really have a point of difference that makes it so much better. You should never be afraid to fully examine your idea, even if it means you might have to give it up.” |
When it comes to following a passion, you may find it helpful to heed Mark Cuban’s advice. Cuban believes the key is to follow your effort, not your passion. “Time is the most valuable asset you don’t own,” says Cuban. And “how you use or don’t use your time is going to be the best indication of where your future is going to take you.”
Now that you’ve evaluated your business idea, you’ve probably found yourself in one of two positions: (1) you’re even more confident in your idea than before and ready to move forward or (2) you’ve decided your initial concept is not the strongest choice, and you’ve begun to rethink the plan.
If it’s the former, and your business is centered on a product, the next step is to think about development. In other words, how will you turn your concept into an actual product?
The first step is to hire a professional designer or engineer. Even if you have a sketch of what you’d like the product to look like, you’ll still need someone to create a CAD (computer-aided design) file, which is required to make a prototype.
For Travis Perry, founder of ChordBuddy, his search started on Google.
“I had a concept drawing, but I needed to get it designed by a professional,” recounts Perry. “So I began Googling ‘engineers who play the guitar’ and ended up finding an engineer who had a son that played the guitar. He loved the idea and really understood the vision.”
Once the engineer designs your product and creates the
CAD file, you’ll need to find a company that can create an actual prototype.
When it comes to getting a prototype produced, there are a variety of different options to consider. Perry chose to build an SLA (stereolithography) prototype, which is essentially a type of 3-D printing. Even as one of the more affordable options, it ended up costing somewhere between $750 and $1,000. That may not sound like a lot, but consider that Travis went through seventeen different prototypes before he was ready to get a mold produced.
“A mold is not what I thought it was,” says Perry. “Mine was the size of a refrigerator and cost about $150,000 to build.”
Finally, when the mold has been tweaked to perfection, the final step is to design and produce the packaging.
Although this entire process can be taxing and expensive, the result is a consumer-ready product.
TANK
TIP
“Take advantage of all the resources you can. I didn’t know a lot about running a business when I first started, but thanks to SCORE (the Service Core of Retired Executives) I was able to get some really amazing free help. Resources like that can make a huge difference.”
—TRACEY NOONAN, COFOUNDER OF WICKED GOOD CUPCAKES
