This week I watched the TV show Shark Tank, as I do every week to see how budding entrepreneurs succeed (or not) in presenting an attractive prospect for the panel of investors. I have been amused (and sometimes shocked) at the number of businesses that seem to lack understanding of the basics of business.
I have heard the ‘sharks’ say a number of times “know your numbers”. There are many who come to the presentation with a good grasp of profit, turnover and margin. But there have been too many who give approximate numbers, who don’t understand the financial questions asked of them or who have unrealistic projections on their turnover. Even if you never seek investors, knowing your numbers is essential for understanding how your business can grow.
In this week’s show, a business owner was asked if her business name was trademarked. Not only was it not trademarked, it was obvious by her reaction that she had no idea that this was essential, nor did she know if it was possible to trademark the name. In this case, possibly for a number of reasons, the business name was changed when the investor came on board. But this is an important reminder for everyone in business: registering your business name with ASIC does not protect you from anyone else using the same or similar name. It is imperative that you trademark it.
The final area that quite a number of businesses appearing on Shark Tank are lacking in, is research. It is one thing to have a great idea, but if you haven’t checked thoroughly for same or similar products and services, your ‘unique’ idea may not have quite the cachet you thought it did! Your research needs to include an analysis of who could easily ‘invade your space’. This doesn’t mean you should squash your idea if an issue is identified. But it does mean you need a contingency or a strategy to combat it.
Michelle Grice writes a weekly column for business women in The Western Weekender