Steve Marr Blog

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Category >> Strategic Planning
May 06
2015

More Lessons from Shark Tank

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Watching entrepreneurs seek investment funds on ABC’s Shark Tank provides interesting lessons about several business issues. Consider the following.

·      Valuation

If an entrepreneur offers 10% equity stake for $50,000 investment, the sharks know that the entrepreneur values the business at $500,000. Sharks will ask for sales and profit numbers. When the numbers don’t support the valuation, a shark will probably ask “Where did you get your valuation?” Most often the response is that the valuation is based on perceived future value, not today’s value.

I often encounter a business person who wants to raise money.  They want to sell equity based on future profits, not today’s profits. King Solomon wrote “Do not boast about tomorrow, for you do not know what a day may bring.” (Proverbs 27:1, NIV) A business may receive a higher valuation, like from Google, based on the market’s perception they will grow fast. Investors are willing to pay for tomorrow’s value today because they think future value will be very high. At times this strategy works out; other times it does not.


The sharks consistently refuse to pay for future value, but offer what they believe is a reasonable offer for today’s valuation. Often the entrepreneur refuses to face reality, and a possible deal escapes.

·      Negotiating.

Another mistake entrepreneurs make is over negotiating. A shark may take themselves out of the offer frenzy, but the entrepreneur tries to change their mind. This happens even when another shark has an offer on the table. The business owner can get too focused on a “no” that they fail to close the offer on the table. This generally irritates a shark and for good reason. The entrepreneur hoping to get an offer ignores the offer they have. I have seen sharks pull their offers back for this reason. Scripture relates, “Elijah went before the people and said, ‘How long will you waver between two opinions? If the LORD is God, follow him; but if Baal is God, follow him.’" But the people said nothing.” (1 Kings 18:21, NIV) An offer requires a decision. You need to decide with a yes or no.

·      Due Diligence

Most people do not know that 50% of the agreed deals never get done after the show. That’s because the sharks have the right to do due diligence before making a final commitment. In some instances, an entrepreneur may take 2 hours for the presentation. They make statements that need to be validated. King Solomon wrote, “The simple believe anything, but the prudent give thought to their steps.” (Proverbs 14:14, NIV) The sharks want to be certain that every verbal representation is correct before they finalize a deal and write a check.

Use these insights from programs like Shark Tank to help your business grow.

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Apr 20
2015

Develop Multiple Plans for an Unpredictable Week

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Recently I received a summons for jury duty stating, “You are hereby commanded that, laying aside all excuses, you appear at the court room of said District court . . .” The term of service was one week. Jury duty did not fit with my schedule, however; I had little choice but to show up.

I started to ask the Lord to release me, but then I felt a better prayer was “Lord, you know my schedule. You know what I need to do. If I need to be part of a jury as part of your plan to free the innocent or convict the guilty, then place me on a jury; otherwise; please release me.”

Mar 09
2015

Controlling Future Growth

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Most business owners want fast growth. However, fast growth may not be the best strategy. Why?  Because quick growth increases risk in several ways.

1.  Understand why you experience rapid growth.

King Solomon wrote, “I have seen something else under the sun: The race is not to the swift or the battle to the strong, nor does food come to the wise or wealth to the brilliant or favor to the learned; but time and chance happen to them all.” (Ecclesiastes 9:11, NIV)

Business often grows slower than desired; other times, rapid growth is more random than planned.  When growth outpaces your ability to service the customer, problems develop.

Feb 23
2015

Where Do You Want To Be In Five Years?

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Frequently I encounter people who want to reach a dream or achieve something different in the future. Looking forward is fine, but to reach a goal you need a systematic plan to get there.  King Solomon wrote, “All hard work brings a profit, but mere talk leads only to poverty.” (Proverbs 14:23, NIV). My grandfather was fond of saying “If wishes were horses then beggars would ride.”

Jan 26
2015

Understand the Cost of Customer Acquisition

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Every business needs to understand how much it costs to acquire a customer. Some don’t believe there is a cost. They think customers are like kiosks in a shopping mall; they don’t have to advertise to get customers. However, the high rent for kiosk space is part of the cost of generating a customer. If the rent is $2,500 and you obtain 1,000 customers, your cost per customer is $2.50. You need to determine if this cost to get one customer fits your plan.

Internet markets that pay per click can figure out how much they pay in advertising and determine the cost of acquiring a customer. If you sell a product with $50 profit, you may be able to pay $35 to $40 to acquire the customer. However, the less you pay; the better.