Just watching Shark Tank, and it is *amazing* how unprepared most people are for questions from people that they are asking for money. I will never sell soap - unless for some kind of charitable /short-term purpose - but do have a business idea/LLC in place w/my sister and BIL for distributing ayurvedic hair care/skin-care products (we would be the US distributor for an existing business created by a family friend in India who has been extremely successful in other, non-US, markets.)
I *suck* at being a salesperson, so I have a huge amount of sympathy for people that go on that show and get hammered for an inability to sell. But it is harder to understand why they are not prepared for simple and predictable questions that would have been answered by a business plan.
Eg, what is the basis of the multiplier for your business? When can I expect to made whole on my investment? What is the basis for that, ie; past/current sales/contracts for future ones? Who are your competitors, and what is their market-share? How does your product vary from theirs, ie; why should I invest in you rather than them?These are not complicated questions, really, and definitely not unpredictable ones. A *real* investor (not a TV) one, if you were asking for a significant amount of money, would be holding your feet to the fire in a much more painful way.
Those questions are just not fun to look at/examine in advance. That is such a critical mistake, though, whether you are asking someone else for money or trying to figure out whether/how much of your own to invest.
I know there is a very good chance that I will not make a profit from my investment in my company - at this point we probably collectively have 70-80k in, that will go up over the next six months, and I could very easily lose it all (which would be a blow, bye-bye little house) - but I would not want to be in a position to not be able to answer those questions at all.
ETA: this post is not really about people who are retired/financially secure, and want to make their soaping costs back, and some extra, rather the ones that are thinking of making a good living at it at a younger (pre-SSI/pension) age. Then it is a much harder battle.
I *suck* at being a salesperson, so I have a huge amount of sympathy for people that go on that show and get hammered for an inability to sell. But it is harder to understand why they are not prepared for simple and predictable questions that would have been answered by a business plan.
Eg, what is the basis of the multiplier for your business? When can I expect to made whole on my investment? What is the basis for that, ie; past/current sales/contracts for future ones? Who are your competitors, and what is their market-share? How does your product vary from theirs, ie; why should I invest in you rather than them?These are not complicated questions, really, and definitely not unpredictable ones. A *real* investor (not a TV) one, if you were asking for a significant amount of money, would be holding your feet to the fire in a much more painful way.
Those questions are just not fun to look at/examine in advance. That is such a critical mistake, though, whether you are asking someone else for money or trying to figure out whether/how much of your own to invest.
I know there is a very good chance that I will not make a profit from my investment in my company - at this point we probably collectively have 70-80k in, that will go up over the next six months, and I could very easily lose it all (which would be a blow, bye-bye little house) - but I would not want to be in a position to not be able to answer those questions at all.
ETA: this post is not really about people who are retired/financially secure, and want to make their soaping costs back, and some extra, rather the ones that are thinking of making a good living at it at a younger (pre-SSI/pension) age. Then it is a much harder battle.
Last edited:
