It’s easy to get heads-down into your business, wearing different hats throughout the day and trying to keep it all going. But if you watch just one episode of a show like Shark Tank, you’ll quickly realize that you need to know about your business and not just work in your business. Here are five lessons we’ve gleaned from the show.
A little bit about MSM- yes, a CPA firm, but not your typical one. I am a passionate advocate for efficient financial reporting to help businesses grow and help the owners to plan for the future!
We’ll discuss a few lessons from the Shark Tank TV show, then look at some tools to help you run your business so you can know the answers!
We’re going to watch a short clip from one of the shows, but first a little background…
The business is an application for recruiting athletes that allows coaches and athletes to connect without violating strict rules of NCAA.
The business owners have just rattled through a ton of information about the business and what it does and how great it is. We’re going to look at this just as the questions get started.
Robert Herjevac – major technology guy, who has sold several tech companies with lots of zeros on the price!
So I used him to talk about knowing your sector. He’s got this down- and so should you.
Where does your product or company fit? Software, Retail, Medical, Technology, Services, Construction?
Is this enough? Software for what? Games or biological warfare? Retail: Food service or children’s clothes? Medical: Healthcare or research?
Drill it down to the specifics. Know what sector is the hottest right now?
Lore Greiner is an amazing celebrity and brilliant business woman who knows retail. She focuses on the person who will be using her products and makes sure it makes their “everyday lives easier”. Know your customer – what are their pain points, what are they currently using or doing that you can improve on, and then make sure you keep listening. Don’t assume – ask them! Constantly. Feedback is the best way to grow and without it you will get behind quickly. Listen, implement change- and rinse and repeat.
Kevin O’Leary, or Mr. Wonderful is known for being opinionated and ruthless. But he always has a plan – and so should you.
So many times entrepreneurs are very short-sighted and think of just short-term plans, but you really need to think long-term as well. Starting acting bigger now – make sure you have an accounting system, have quarterly reviews, and even an advisory board. An advisory board of people who have done it!!! Make revenue projections and control expenses – just like big companies do…yes, that’s a budget. Be bold enough to make changes in mid stream when your budget is totally out of wack.
Have a cash flow projection updated at all times so you will know when you will need money. Have you though about how to fund your business? Personal, borrow from parents or friends, crowdfunding, outside the box? Non voting preferred shares with dividend payments? Have you given though to the fact that you may end up losing control of your company going after venture capital?
Where will you be five years from now? If you are not planning now, you are already behind.
Daymond John is a man who knows how to prepare. He is dressed to the nines, and has made a fortune in clothing. He is a branding expert, and really, that is much of what branding is about is being prepared- in how you present yourself and your company.
From your logo to your website, get someone to help you who knows what they are doing. And when you get the opportunity to present to a bank, customers, investors or whomever, be confident. Prepare for the meeting- have your facts together, have information that you need at your fingertips, know who you are speaking with, and do all you can to make sure you are as ready as you can be. It will calm your nerves, and let you focus on the moment and think clearly.
Barbara Corcoran started at the bottom as worked her way up. She knows all aspect of the business, and that includes the numbers.
And if you want to succeed, you have to as well. What is your revenue, cost of sales, biggest expense, breakeven point? How much cash is in the bank today, who owes you what, and who do you owe? You should be able to get your fingers on that information within seconds- not days or weeks but seconds. You have to know your business. You need a trusted advisor, but you need to take the motto – trust but verify. It is YOUR business, not theirs, so make sure you know what’s going on.
How fast can you adapt to a cash flow downturn? How fast can you adapt to changes in your industry that directly affect your bottom line? Do you rely on last months numbers to make current decisions? Most do. What good is that information now?
If you’re not able to get to those numbers quickly, then you may be on the wrong accounting system. Then you have to call your accountant, but he is out of town. He/she can’t access the numbers anyway until back in the office. But there’s more to a business than just accounting, though it is like the hub of all the information. You will find that you manage your business from other applications, but they should all tie into the accounting.
So let us show you a few tools we use to help our clients make sure they have mastered the lessons from the Shark Tank.
Xero- the big blue circle right in the middle is the accounting application. But it’s not like your typical system we have all been tortured by for the past 20 years. I’ll show you it in a moment.
The others around it, are applications that integrate with or talk to Xero.
How many of you have heard of Square? It’s a point of sale c/c processor, that retailers can use to track sales and accept payments, among other uses.
Bill.com is a great way to manage your payments to vendors, and even accept payments from customers now – all without checks! Woohoo!!
ADP – the necessary evil of payroll- but now it too is in the cloud and makes the process much easier for everyone to stay compliant on a massive rulebook which is payroll taxes and regulations!
Receipt Bank is a tool to help you avoid the massive box of receipts that you actually need to keep for your record keeping in your company.
And then there is Spotlight Reporting, that gives you insight into your business that you never had – including financial and non-financial information – for example, how many clients, subscribers do you have and what is the average sale to each? Or perhaps you want to analyze your inventory turnover ratio, etc. All that you can do in Spotlight.
But as I said, the accounting system is at the center for a reason. Mike mentioned you have to know your numbers – and access them in seconds. So let’s do that…
