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Plan My Wedding Share 5 Fantastic Tips To Win Over The Shark Tank

The main 5 points we thought were very valid after watching other episodes and comparing it to our pitch. We would say these were the top 5 key notes that we still take note of today.

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South Africa recently played host to the award winning reality TV show Shark Tank, which was aired on prime time on Mnet at 6pm every Sunday for the past 12 weeks.

In Shark Tank South Africa, entrepreneurs go up in front of a panel of esteemed successful South African business moguls, known as the “sharks”, who are willing to invest their own money and time in deserving and potentially lucrative business ideas.

The trick is in convincing these highly critical and experienced sharks that it will be worth their while to bankroll your business, product or invention.

Co-founders Jason Newmark and Chelsea Evans of Plan My Wedding, recently pitched their start-up business idea on the show. They were successful in securing a R400 000 investment, from Gil Oved (Co-founder and CEO of the Creative Counsel – South Africa’s largest marketing and advertising company with annual turnovers of R700 million rand and Dawn Nathan Jones (former CEO of Euro Car – leader of one of South Africa’s most successful car rental companies) for 25%  each equity stake in their business.

Related: The Shark Tank Investors On What Makes A Start-Up Investable

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The main 5 points we thought were very valid after watching other episodes and comparing it to our pitch. We would say these were the top 5 key notes that we still take note of today

1Valuation

Watch how the sharks deal with valuation. Every Shark Tank pitch starts with contestants asking for a specific amount of money in exchange for a specific percentage of ownership in their business.

This establishes their proposed valuation. So for example, if they want to give 10 percent of the company for R100 000, that’s a valuation of R1 million; and 30 percent for R150 000 is a valuation of R500 000. It’s simple math.

Investors like valuation to relate to your real business numbers, such as sales, gross margin (price less direct costs), and fixed costs. On the show, the sharks frequently object to unrealistically high valuations; sometimes they make their own offers based on much lower valuations.

That’s a simple matter of making offers and counter offers. Very rarely, they’ll accept a valuation based on the value of proprietary technology, or brand impact, aside from actual business numbers.

Because the Shark Tank is about television entertainment, it keeps valuation simple. Every start-up should understand the basics as it deals with potential investors.

2Market Size

The sharks want businesses that appeal to interesting numbers of possible buyers. They want interesting markets that can grow, not very focused niches that look like they’ll remain small forever.

3Defensibility

Sharks often ask: “What do you have that I can’t just do myself? I can take the money you want, hire some people, and become your competitor.” That’s about defensibility. The sharks want to invest in a company that isn’t going to be blown away by competition in the near future.

Defensibility comes in different ways for different businesses. Occasionally it’s a matter of a strong patent. More often, it’s secret formulas, secret ingredients, trade secrets, and relationships with channels of distribution. Sometimes it’s progress made in branding. Without defensibility, the investment is not attractive.

Related: Avoid These 7 Mistakes When Pitching to Big-Time VCs

4Scalability or Leverage

Scalability or leverage is easy to understand when you think about products compared to services. If you sell products it’s easy to imagine gearing up to make a whole lot more of them if sales grow. A product business is scalable. Some service businesses — Plan My Wedding Application is a great example — we are also scalable, even though we sell services.

It’s not a coincidence that very few of the Shark Tank contestants are selling services. Services are great for owner-operators, but not a great opportunity for investors.

In the first season on Shark Tank SA the sharks turned down highly qualified and educated entrepreneurs because it didn’t seem easy to scale up without them.

5Industry Bias

The sharks frequently prefer industries and businesses that match their experience and previous investments as well as the conscious belief and values.

Shark, Dawn Nathan Jones tends to like woman in businesses and supporting young entrepreneurs, Gil Oved would steer more towards the attitude of an individual over and above anything. Sharks are more likely to invest in types of business they know, and the contestants, when it turns out they have a choice, value certain sharks more for certain kinds of businesses

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

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Lessons Learnt

#Wealthiest List: 8 Self-Made Millionaires On How They Built Their Wealth

These inspirational self-made millionaires built businesses with nothing less than hard work and sheer determination.

Catherine Bristow

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1. Nick D’Aloisio Wrote a Million Dollar App At Age 15

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At the age of 15, Nick D’Aloisio wrote an app while sitting in his parent’s bedroom in the UK. At the age of 17, D’Aloisio sold his app Summly – a mobile news summarisation app to Yahoo for a staggering USD 30 million.

As one of the youngest millionaires, D’Aloisio is also the world’s youngest entrepreneur to be backed by venture capitalists – having secured seed funding from Sir Li Ka-Shing, Hong Kong’s billionaire, as well as raising USD 1.23 million from celebrity investors, including Yoko Ono and Ashton Kutcher.

“The number one thing I did that I think was wise was to get, through some of my advisers, was a Chairman; basically someone who was a very experienced business person, an industry veteran — Bart Swanson, who had been at Amazon and then Badoo. Then, myself and Bart really started finding people and growing the team.”

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7 Cannabis Industry Millionaires Making It Big In The Marijuana Business

These entrepreneurs have capitalised on a new market set to continue to grow rapidly as more countries legalise marijuana across the world.

Catherine Bristow

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1. Brendan Kennedy

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Brendan Kennedy worked on job sites as a carpenter to pay his way through university, with his eyes set firmly on becoming an architect, until the allure of Silicon Valley changed the course of his direction. While working at technology start-ups Kennedy began thinking about the possibilities that medical marijuana provided.

“I was really sceptical of medical cannabis,” he says. “It took a year of having conversations with patients and physicians and hearing the same story, repackaged but essentially the same, over and over and over again, where my scepticism eroded and I became a believer.”

In 2013, Kennedy and his partners applied for a licence from Health Canada and launched Lafitte Ventures, which was later renamed Tilray. Today, the company is a global leader in medical cannabis research, cultivation, processing and distribution.

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Scaleup Learnings From Our Top Clients – What The Most Successful Entrepreneurs Do Right

So, how do our successful clients move through these constraints to scaling up? We see four key drivers of success, and they are: people, strategy, flawless execution and finance.

Louw Barnardt

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You’re out of your start-up boots, staff is increasing, your client base is growing, revenue is up and you’ve proven your case to the market. Now it’s time to scale up. The challenges of this vital growth phase are different and it’s a time that demands different mindsets and different actions. In a world littered with small business failures, it helps to be well-prepared for scaling up using a proven methodology. At Outsourced CFO, we get an inside look at the success factors of our clients who are mastering the transition.

On the one hand, scaling up is a really exciting phase; this is what moves you into real job creation and making an impactful contribution to economic growth. On the other hand, it is really hard to scale up successfully. We see three major constraints that limit companies’ transition from start-up to scale-up:

Leadership

The business has to have the leadership that can take it to the next level. When you start scaling up, especially rapidly, the founders can no longer do everything themselves. The team must grow and include new leadership talent that can take charge and execute so that the founders are working on the business instead of in the business.

Infrastructure

The processes, procedures, networks, systems and workflows of the business all need to be scalable. This is imperative when it comes to your infrastructure for the financial management of your business. You’re only ready for growth when your infrastructure can seamlessly keep pace.

Market access

Scaling up demands more innovative marketing and storytelling so that you can more easily connect and engage with the new employees, clients, network partners, investors and mentors that need to come along with you on your scale-up journey.

Businesses that build a market conversation and a compelling brand narrative during their start-up phase are better positioned to have this kind of market access when they need to scale up.

People

It is critical to have the right people on your team. Our successful entrepreneurs have what it takes to attract, inspire and retain top talent. A strong team of smart, ambitious and purpose-driven people who love the company and want to see it succeed contribute greatly to a world class company culture. They are adept at communicating a compelling vision and establishing core values that people can take on. These entrepreneurs are tuned into the aspirations of their people and focus on developing leaders in their teams who can in turn develop more leaders.

Strategy

It is planning that ensures that the right things are happening at the right times. At successful scale-ups strategies and action plans are devised to ensure that the most important thing always remains the most important thing.

Strategy includes input from all team members and setting of good priorities for the short, medium and long term. Goals are clear and everyone always knows what they are working towards. The needle is continuously moved because 90-day action plans are implemented each quarter to achieve targets and goals that are over and above people doing their daily jobs.

Flawless execution

Top entrepreneurs are not just focused on what operations need to achieve, but how the business operates. They have the right procedures, processes and tools in place so that everyone can deliver along the line on the company’s brand promise. Frequent, quick successive meetings ensure the rapid flow of effective communication. Problems are solved without drama. There is no chaos in the office environment. Everyone is empowered to execute flawlessly to an array of consistently happy clients.

Finance

Everyone knows that growth burns cash. A rapidly scaling business faces the challenge of needing a scalable financial infrastructure to keep the company healthy. Our successful entrepreneurs pay close attention to finance as the heartbeat of the business, ensuring that everything else functions. They look at the tech they are using for financial management and for the ways that their financial systems can be automated so that they can be brought rapidly to scale. The capital to grow is another vital finance issue.

The best way to finance a business is through paying clients on the shortest possible cash flow cycle. However, when you are scaling up and making heavier investments in the resources you need for growth, it is likely that you will need a workable plan for raising capital. Our scale-up clients know the value of accessing innovative financial management that provides high level services to drive their business growth.

Navigating the scale-up journey of a growing private company is one of the hardest but most rewarding of careers to pursue. Having people in your corner who have been through this journey before helps take a lot of pain out of the process. No growth journey looks the same, but there are tried and tested methods that will – if applied diligently – lead to definite success. Happy scaling!

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