Why I Chose Not to Go on 'Shark Tank' -- and Why It's Okay for You to Say No, Too
Ah, Shark Tank, the budding entrepreneur's pièce de résistance. You'd be crazy to turn down an offer to be on the show, right? Well, as the founder of fashionable compression legwear company VIM & VIGR, I decided the critically acclaimed reality show wasn't the right choice for my business at the time. Having sold almost 250,000 pairs of socks since September 2013 and on track to have a three-year growth rate of more than 250 percent in annual revenues, I was approached to pitch my company to the Sharks. But, swimming upstream so to speak, I have three reasons why I chose not to bring my business onto the show and why it's okay for other business owners to say no, too.
1. Sole proprietorship benefits
I am the sole proprietor of VIM & VIGR and I have complete control and decision-making power over my business. The legal costs to form a sole proprietorship are minimal, the company can be sold or transferred at my discretion, and taxes are filed as part of my personal income tax payments -- meaning I can avoid paying corporate tax payments. While the extra cash flow from Shark Tank investors sounds enticing, my business was already cash flow positive so I wasn't interested in giving up all of these benefits.
For your business, you need to consider whether the benefits of sole proprietorship outweigh the risks of giving up a percentage of your company. It's all a numbers game. Take a bird's eye view of your company's expected growth and factor in what outcomes you'd expect from each decision. From there, you can determine whether or not opening up your company to investors is worth taking the bait.
2. Authentic growth
VIM & VIGR has experienced sustainable, controlled and authentic growth over the past four years, and while Shark Tank has the potential to exponentially grow companies, I wanted to control the brand integrity and didn't want product quality to suffer in compensation for meteoric growth.
With nearly 900 reviews on our site with an average star rating of 4.6, it's clear quality hasn't been compromised. Nowadays, people are looking for more than just a product or service, they want an experience. For VIM & VIGR, community investment is a non-negotiable. A strong focus on customer service coupled with engaging one-on-one social media interactions and a stream of useful health related content, VIM & VIGR strives to build meaningful relationships with each and every one of its customers.
If you decide to open your business up to investors, you might find yourself elbowing your way to have a seat at the decision-making table. If authenticity is something your brand prides itself on, keep this in mind.
One of the most important factors to consider when making a business decision is timing. Oftentimes business owners make the mistake of agreeing to opportunities even if their company isn't prepared to take on a new venture. This happens because they feel pressured to say yes to opportunities they think won't come to fruition again in the future. For me, saying no to Shark Tank right now doesn't mean it will be no forever. At this point and time, it doesn't make sense for VIM & VIGR to partake in the series, but that doesn't mean I wouldn't consider this opportunity down the line if the timing were right and if it fit within my growth strategy.
The most important thing you can do is give yourself permission to change your mind in the future because even with all of the technology and data we have available today, you still can't know exactly where your business will be later down the road.
The entrepreneurial world is a balancing act full of profits vs. expenses, account retention vs. account expansion, supply vs. demand, etc., oftentimes leaving business owners to make tough decisions that propel or halt success. Shark Tank could have exponentially increased profits or resulted in sacrificing the integrity of my business, which is something I wasn't willing to gamble.