“Shark Tank” is that awesome reality television show on ABC in which entrepreneurs seeking investment in their small companies present themselves to potential investors. It’s called “Shark Tank” for a reason.
On “Shark Tank,” the would-be investors know what they are doing, and when a wide-eyed, wet-behind-the-ears entrepreneur walks in with a great business idea, these sharks smell blood. Their gracious smiles are reminiscent of Mary Howitt: “Come into my parlor, said the spider to the fly…”
The entrepreneur always seems to want to make friends with the investors, which is only his first mistake. The investors could not care less about friendship, but will take the time to talk to the him if they think they can make money. The more time the investors spend talking to the business owner, the more money they smell. The entrepreneur never seems to understand this.
There is nothing friendly about how the investors treat him. Once they smell money, they start shooting questions at the hapless business owner and pointing out everything wrong about the business. Once the poor guy is completely deflated, the sharks start making offers.
1. Know What You Want Before You Ask
With his confidence ripped out from underneath him, the entrepreneur is ripe for the picking. If he asked for $100,000 for 10 percent of his company, the sharks want 25 percent. Sometimes he looks shell-shocked, because he never considered the possibility that the sharks would counter-offer. And he has just a few minutes to figure out what 25 percent of the company means to him, because he hasn’t thought about it before.
Know what you want before you ask. Whether you are asking your boss for a raise, or vacation time, or to be included in a project, know what you want and what compromises you are willing to make. At the same time, know what compromises you will not make, and be prepared to walk away from the table if you are unable to get a deal you are happy with.
Thinking ahead about what you will and will not accept prepares you to negotiate.
2. Negotiate
Learn to negotiate. Sometimes the entrepreneur says, “25 percent is too much, but will you take 15 percent?” The sharks know whether they will or won’t.
Often the entrepreneur stands there unsure what to do. That is when the sharks start barking, “You have an offer on the table, will you take it?” They don’t want the business guy to think too long, or he might negotiate.
In life, don’t feel obligated to take the first offer, and be comfortable negotiating for what you are worth.
3. Read Between the Lines
This one sounds abstract, but refers to basic communication skills. Remember, the sharks are not going to waste time on an entrepreneur with a bad idea. The more time they spend shooting questions and arguing, the more interested they are. If the business person remembered that, he would be less flustered.
The sharks start floating offers because they are interested. They just spent ten minutes insulting the business to prepare the entrepreneur for the conquest. Time spent and offers floated means the business is a good one, and the entrepreneur should consider the options and take a deal he is happy with.
The same principles hold true in life, in job interviews, in salary negotiations. Most people won’t waste time talking to you if they are not interested. People who are going to work with you want to know your strengths and weaknesses.
Time invested and an offer extended indicate interest. Recognize that, know what you want and be ready to negotiate.
Tell Us What You Think
Talk about your favorite Shark Tank episode on Twitter.
More From PayScale
Keep Your Quarters, Forget the Ice Cream
“Nickel and Dimed: On (Not) Getting by in America,” by Barbara Ehrenreich
(Photo Credit: Stormydog/Flickr)
Leave a Reply