Being in the position of an investor is the
easy part. As an investor there is only one thing that worries you, how are you
going to get your money back? Well, there
is another thing: how can you duplicate or triplicate that money. By observing
Robert Herjavec and Kevin O’Leary I learn interesting things each time. I
analyze their questions, advices and decisions when making a deal with an
entrepreneur. Sometimes we are so involved in our business and we believe and
love it so much, that we do not sit down and analyze every detail there is. It
is amazing to see how investors like Kevin and Robert make you reason about the
product or service you are bringing to the table. Most of the time Robert will
ask for equity on the company, but Kevin will ask for royalties or he will want
to make a licensing deal for the product or service.
From those investors I have learned many
valuable lessons that I intend to apply, such as:
- Know the value of your company: Be able to demonstrate to any investor why your company is worth “X” amount of money.
- Analyze your margins: Know your costs and selling prices.
- Profit: An investor will always ask you how much money are you making or how much money will you make in the future.
- Always pay yourself: If you do not pay yourself, the business is not working.
- Have a distinctive advantage over your competitors: Be different in some way.
- Risks: Be prepared to show them the risks on the plan.
- Show them your passion towards the business.
- Preparation: Before pitching anything to an investor, know your business from head to toes.
- Last but not least: Be Decisive.
Based on all the important things I have
learned from Robert and Kevin now I analyze every little detail there is on my
business plan. For me the most important
element on my business plan are the financials. How I am going to get the money
to start my business and how I am going to increment that money? Also, by
observing their perspectives I made some changes on the marketing plan and the valuation
of the company.
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“Successful businesspeople retain a
quality most others not only lack but often fail to comprehend, and that’s the
unrelenting drive to convert a vision into reality. They are driven to realize
this goal in a manner that appears to defy logic among others who lack this
drive.”- Robert Herjavec
My
fellow entrepreneurs when presenting your business to investors I think the
most important sections of your business plan are: the executive summary, the financial
projections, the marketing plan and the description of the products/ services.
I want to leave you with this interesting
quote: “The
biggest mistake entrepreneurs can make is trying to do everything themselves.
They usually blow up when they try. I did an inventory of every deal I've ever
done and it turned out that every single deal I made money on was a
partnership, and every colossal failure, where I lost millions, was something I
tried to do by myself.”- Kevin O’Leary
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