Author's note: This article first appeared in The Azimuth, the newsletter of Compass Check Consulting Services.
Generally, consultants are loath to give free advice. That’s our only product, of course, and it’s hard to bill for free stuff. Regardless, here’s some counter-intuitive advice for entrepreneurs: Watch TV.
Not just any shows, mind you, but two specific shows that can shed light on the operations and position of your business. They provide a free education on what it takes to build beyond the “3 Fs” of start-up finance (family, friends and fools) and grow a thriving enterprise. Unlike reality shows featuring a certain real-estate developer, these have real business issues addressed by real experts.
First is “Shark Tank” running on ABC on Friday nights. If you have any intention of seeking investors or selling your business, this show is a must. If you can’t answer the question “what’s my business worth,” this show is an eye opener.
It is, essentially, venture capital speed dating. Entrepreneurs stand before five billionaires and pitch their companies for investment. Sometimes the “sharks” get into bidding wars as to who will get a share of the company. More often, the entrepreneur leaves empty handed. But most often, a shark bids the entrepreneur into a giving up significantly more equity, but they get the money.
The blatant mistakes are shocking. Often, the little guys reveal they have no idea what the business is worth, or how to value it. An entrepreneur who offers 5% of a pre-revenue business for $50k is saying his idea is worth more than $1 million. Yet, that happens.
If you’re asking for investment, you don’t dictate the rules and you don’t tell a billionaire that if he wants 25% of your start-up he’d “better work 16-hour days” like you. Seems obvious, right? Yet, that happened (the entrepreneur left empty handed).
If you have long term goals of making the big time, Shark Tank will sharpen your focus, and teach you a lot of what not to do.
On the more detailed side, Food Network has a show for any small-businessperson, even if you can’t make toast. Chef Robert Irvine’s “Restaurant: IMPOSSIBLE” features the high profile chef revamping a struggling restaurant from the ground-up in 48 hours.
While this is about restaurant operations on the surface, it really is a primer on small business management. No matter how bad the food offered, Chef Irvine generally doesn’t address the menu until the closing few minutes of the show. Why? While the quality of food is obviously key to survival of a restaurant, most restaurant problems are really business problems.
What’s more, his menus are invariably very simple. This is the biggest take-away. Food is simply the product. Were Irvine a mechanic or engineer he’d still have a show, because the product is just one facet of a business. In fact, the product may be the only thing that’s fine– but it alone won’t keep a business going.
Irvine spends far more time addressing issues like presentation and service (read: marketing). He looks at inventory systems and does quick Excel analysis that show the owners where, why and how much money they are losing. He’ll strip down variety on a menu to create a more manageable offering that is both affordable and tastier. He’ll sometimes give the staff lessons in customer service. And, in almost every case, he develops the owner as a leader.
Each episode has lessons to benefit any enterprise. Ideas like inventory control, customer service focus and leadership (not just management or ownership) can make or break all businesses.
Seeing them in the context of a different industry can give you a great perspective on your own company. Because, in essence, Irvine is more a business consultant than a chef. Wait: I think that technically makes him our competitor.
I wonder: what the sharks would say about giving your product away for free to the benefit of the competition?