Of all the reality TV shows that I have seen, nothing can come close to Shark Tank when it comes to sharpening one’s entrepreneurial and negotiation skills. It gives participating entrepreneurs an opportunity to present their business proposal before five accomplished investors (sharks) on stage and ask for an investment in return for a stake in their company or venture.
Naturally, it is a tough spot to be in. Most people take away something from the show, either a check, valuable advice, or a great experience.
Naturally, it is a tough spot to be in. Most people take away something from the show, either a check, valuable advice, or a great experience.
1. Don’t reject valuable advice
Every business negotiation is an opportunity to learn. Even if you lose the deal, don’t lose the lesson. Even when the sharks refuse your deal, they often give you their reasons, opinions and advice about the way forward for your business. This is something that you can’t get for free, not from people as experienced as the ones at the Shark Tank. Don’t let these valuable tips get lost in the cloud of disappointment.
2. Don’t underestimate the value of expertise
In any deal, don’t just look at the money, give due value to the expertise or other benefits the deal brings you. For example, each shark has their own network and expertise which comes from them taking a stake in your company. Think about what it will do to your sales and brand promotion. Take the example of the company M3 Girl Designs whose founder was offered $300,000 by Mark Cuban and Lori Greiner. She insisted on having Robert Herjavec also in the deal before she accepted it. She got a much better deal in the form of added expertise even though everything else remained the same.
3. Know the people you are negotiating with
Many people have lost deals because they tried to take the negotiation too far. Some homework on the successful deals with the sharks would have prevented this from happening. When Mark Cuban says that he is making a final offer, it is a final offer. Try negotiating further and you lose the deal. This need not be true for everyone. So knowing the negotiation style of the people with whom you are dealing with is an advantage.
4. Never shift your goal posts
Mark Cuban offered one entrepreneur what he asked for, but the person tried to negotiate a better deal and eventually ended up losing it. Nobody prefers to do business with someone who keeps asking for more because the person could do that again in the future.
5. Know the limits of what you can accept
This is very important in any negotiation. If the experts in the Shark Tank get the idea that you are not sure of how low you can go, they will sense that there is more scope for negotiation. One entrepreneur decided to think things over before deciding to accept or refuse a deal and in the meantime the sharks lowered the offer further. The other problem is that you could end up accepting something which you would not have accepted if you knew your limits.