If you’re an up and coming businessman, or you wish to be soon, and you’re wondering if your next big idea is a good one, or are trying to come up with a good idea, here are some things you can learn from the reputable hit TV show Dragon’s Den.
Approach Every Opportunity As If You Were Going On The Show
Every opportunity or idea you come across, put yourself in the drivers seat and act as if you were going on the Dragons Den show, this way you’ll do everything you need to do to see if the business will be a success or not. Whether you agree with the dragons’ opinions or not is irrelevant, but having the mindset as if you were going to approach them on the show will certainly get you to put everything in order to see if your next idea, or an opportunity presented to you, is going to be a cash magnet. These entrepreneurial lessons will take you in the right step to becoming a success.
Do Your Due Diligence
Most of the dragons have a net worth of over $500 million, and if you were going to approach them, you best know your facts. Sure you should expect to make a lot of money, but if you don’t get your facts straight, you won’t get far. The last thing you want is someone that could be a potential investor to ask you a question about your own business that you have no answer to.
These important questions include answering questions such as, what your target market is, is there even a need for the product, what the margin of profit will be for your product, what your expenses are, and how many sales you project to make.
Most people on the show that don’t get a deal, don’t have real, hard facts, but mere guesses of how big the market is, or what they think the margin of profit will be. Instead of guessing, actually do the research, write everything down and get the facts straight so you KNOW if the business is going to be profitable. Rather then hoping and wishing, you need to integrate an educated and calculated assumption and idea of what you predict to occur based on your due diligence. If all makes sense in your mind and in your gut, and all the second guessing has been addressed, then move confidently in the direction of your dreams.
Money Has No Feelings
A lot of people are scared of doing their due diligence because the reality may be that it might not be a profitable business, but like Kevin O’Leary always states on the show, “money doesn’t care how you feel”.
Another reason many people fail to get a deal on the show, is because they have an emotional attachment to their business. Having this attachment in business could set you up for chaos because if that idea doesn’t work out, you won’t know when to let go and as a result you will go down with your idea leaving you in a huge pile of debt. When you stay detached from your business, it will not personally effect you in any way, and likewise, if your business succeeds, you won’t become an ego-maniac with a lot of money, but instead you will be rich and humble.
Sure you should be passionate about your business, heck, even excited, but when “working” on your business, don’t bring emotion into it, because chances are high that your emotions will make you take the wrong types of action. You have to learn to take logical decisions that also align with your intuition, and not decisions based on ego.
Don’t Overvalue Your Company
The biggest mistake the presenters make on the show is overvalue their company by a whole lot more than what it’s worth. For negotiation purposes you do want to overvalue your company, but only based on the sales you’ve made. No potential investor will care how big you think your idea will be; they care more about the facts, and how many sales your company has made to date. You may believe your business is going to be huge, but your business is only worth the results it has currently accomplished, period.
So when valuing your company for any reason, base it on real results that have occurred, for example if you want to start a successful business that sells cupcakes, you may have the best tasting cupcakes, everyone may have even told you that your cupcakes are better than every other type they’ve tried, but the bottom line is that your business is only worth the amount of cupcakes you’ve sold. So the potential may be there, but when evaluating, potential shouldn’t be strongly taken into consideration. An investor will only pay the amount your company is worth, not what you “think” your company could be worth.
50% is the Product, 50% is the Presenter
When you watch the show, you will realize that most, if not all of the deals that the dragons make are with presenters they like. They know that if they can’t get along with the partner, they don’t want to be a part of the deal.
When approaching someone with a business opportunity in hopes to build a partnership, or get investment capital, you have to learn to become a like-able person, in other words, you have to learn to be an enthusiastic speaker because your energy will be contagious as it spreads from person to person, and everyone you come in contact with, whether potential customers, partners, or investors will feel it.
If you don’t watch Dragon’s Den or Shark Tank, and you’re a businessman, maybe reconsider and try to apply some of the principles that you could learn from the show. Next time, take notice, watch and listen carefully, you may learn to turn your next business idea into a superb money-making machine, just like the investors on the shows have.