Know what your product/company is really worth.
At this point, any contestant who doesn't know their numbers (income, expenses, etc.) backwards and forwards are just asking for trouble. Trying to coast on your personality or unusual product without knowing the financial realities of your business is going to cost you--both on Shark Tank and in the real world.
Former contestant Kelly Costello (of Puppy Cake) had this to say about why numbers matter: ""I went onto the show thinking that my passion and unique products would be all the Sharks needed and neglected to spend time on the cold hard facts of my company’s current and potential profits."
Know your potential investors.
If you watch Shark Tank enough, you know that when Mark Cuban says this is his final offer, you either say yes or accept the fact that he's going to pull it if you say no. To my knowledge, no one who's tried to push beyond the point of no return with Cuban has been successful--and if they had known who they were pitching to, they wouldn't have made that mistake.
If you're turning to outside investors to help fund your business, getting to know them (and their quirks) is essential. Things go wrong in a business when the owner and the person holding the purse strings aren't on the same page.
Who you know is important.
The Sharks on Shark Tank aren't there simply because they're rich--they have more to offer contestants than just money. Case in point--Lori Greiner is a Shark with connections to QVC, and I'm sure there are more than a few contestants who would like some air time on that channel. A lower offer might even be worth the opportunity to sell on QVC for some.
Stuff like this happens in the real world too. Just because someone is willing to throw money at your company doesn't mean they are the best fit. Investors with big networks and business know-how can often be more valuable than investors with bottomless pockets.
Create a product that you personally want/need to use.
If you want to create a product that you're a total expert on and can sell effortlessly, then create something that you personally want or need to use. People can spot passion and authenticity from a mile away, and generally they respond well to it.
This approach has benefited several contestants over the years--including the inventor of the ChordBuddy who wanted to help his daughter learn guitar and the inventor of the Wine Balloon who needed a way to keep his wine fresh for longer.
Your personality can be just as important as your product.
Now, don't expect to coast through the business world with a terrible product and a charming smile, but having a good personality and being the kind of person people gravitate towards can absolutely help your company.
Former contestant Ryan Bethencourt (who got $500k for his dog food company, mind you) realized this was an important aspect of the process and had this to say: "We've all seen people on the show whose business idea wasn’t exactly going to save the world, but the passion and integrity that entrepreneur showed made us root for them."
Demonstrate your personal commitment to investors.
Why should someone else take a risk on your business if you're not willing to? The Sharks want to see that you have some skin in the game, which is probably why they responded so well when the creator of Tipsy Elves revealed he quit a $170k job to work on his company full-time.
In the real world, demonstrating this commitment to potential investors is just as important. Strangely enough, they feel reassured when they see that you have something to lose from running your own business.
Be flexible and creative when it comes to funding.
Sometimes the normal way isn't always the best way, and we see that specifically with Mr. Wonderful (aka Kevin O'Leary). He's been known to offer royalty arrangements (where he gets a portion of every sale) to contestants instead of asking for equity in exchange for funding.
In the real world, you'll also want to keep an open mind when it comes to finding the funds to run your business. It might not be a Mr. Wonderful-style deal, but don't be afraid to say yes to an opportunity just because it's not the opportunity you were expecting.
Know when to say no.
You might think it's crazy for someone to fight to make it on Shark Tank only to say no to an offer, but "no" is the most important word a negotiator needs to learn. It's not like everyone in the world is out to scam you, but sometimes even a good-faith offer deserves a solid no.
Case in point: on the very first episode of the series the company College Hunks Hauling Junk said no to an offer because it meant giving up complete control of their entire franchise. And considering that they are bigger than ever, it was probably a smart move for them to walk away.
Sometimes, other things are more valuable than money.
Money may be the goal, but you'll need more more than just that to run a successful business. When Steve Gadlin got an offer from Mark Cuban for his bizarre "I Want to Draw a Cat for You" business, Gadlin asked if Cuban would be willing to draw and sign every 1000th picture. He agreed, and Gadlin got something more valuable than Mark Cuban's money--Mark Cuban's clout.
Obviously a business can't survive on celebrity tie-ins alone, but you should always be on the lookout for opportunities that are a bit more creative than just cold hard cash.
No one can do it alone.
No one is great at everything, no matter how painful that is to admit. So, if you want to have a successful business, you need to surround yourself with people who shine in areas that you don't.
Shark Kevin O'Leary has been explicit about this advice of assembling a team that plays to your strengths and weaknesses--"My partners […] taught me that in order to create wealth, I needed to pair up with people whose strengths compensated for my weaknesses."
A single failure doesn’t ruin you.
You're much more likely to hear a "no" than a "yes" on Shark Tank, but just because a company gets rejected on TV doesn't mean it's the end of the road. And the same goes for real life too--be prepared for rejection because it's coming, but it doesn't have to ruin you.
When Jamie Siminoff pitched her company, Ring, to the Sharks, she left empty-handed. However, her exposure on the show ultimately helped her business, even if she didn't up with a lucrative deal on air. She had this to say about her time on the show--"In terms of dollars, it was worth millions, but it also brought and provided an incredible amount of credibility and awareness for us with industry partners."
Don’t celebrate a deal until the ink is dry.
Nothing is over in business until you have it in writing. And if Shark Tank has taught us anything, it's that celebrating too early will only lead to heartbreak down the road.
There have been numerous deals made on-air that have later fell through behind the scenes. Once the cameras stop rolling, the Sharks still need to do due dillegence before they ink a deal with any of the contestants. Unfortunately, lots of agreements fall apart at this stage of the game.
Unusual isn’t always better.
There are some products out there that are just so weird that people feel compelled to try them out, but most of the time, the most successful products are also some of the most pragmatic ones. It's true that sometimes a good idea comes from left field, but that's the exception, not the rule.
Shark Tank has seen its fair share of bizarre pitches, but the strangest one to date probably has to be the Sullivan Generator. Mark Sullivan showed up with a pitch for a hypothetical generator that could harness the rotation of the earth and that produced gold as a by-product. While the Sharks were no doubt intrigued, they obviously said no to this hare-brained scheme.
What you do is more important than who you are.
Everyone loves an origin story with some adversity, but unless you've got a killer product to back it up, you're never going to create a successful business with a unique point of view alone.
Shark Tank has seen plenty of inspiring stories from contestants, like the creator of Hammer Nails who went from being on the streets to being an entrepreneur. But at the end of the day, no matter how touching his story was, the guy was still trying to pitch a nail salon for men, which, unsurprisingly, got no offers from the Sharks.
More investors can be a good thing.
More investors might seem like a bad thing--there are more people to meddle with your company's vision, right? Surprisingly, that's not always the case. The people giving you money have power over you, but if you spread that power among a bunch of different people, they have less individual opportunity to throw a wrench into your plans.
For example, when jewelry company M3 Girl Designs was on the show, they got offers from Mark Cuban and Lori Greiner. However, they asked if Robert Herjavec would join in for the same price, and he agreed. So, they ended up with the expertise of three sharks without making any one of them too powerful.