Get All Access for $5/mo

These are the 6 Most Important Takeaways From 'Shark Tank' Investors A special excerpt from the upcoming eighth edition of Entrepreneur Press' 'Start Your Own Business: The Only Startup Book You'll Ever Need,' available for pre-order now.

By Kenny Herzog

The following is an excerpt from Entrepreneur Press' Start Your Own Business: The Only Startup Book You'll Ever Need, 8th Edition. Pre-order your copy today here!

While many business owners have been re-tooling and jump-starting their businesses as we collectively work our way past the pandemic, many up-and-coming entrepreneurs are once again finding their footing and taking steps to start a business.

The basics of business remain the same: Wow customers with products and services that meet their needs, stay abreast of what the competition is up to, try to be one step ahead of them, and give the people what they want. Today, however, the ways and means of doing business are changing at an accelerated pace, and it's important to stay ahead of the learning curve, whether you are trying to find investors, hire the best people, create a dynamic business culture, go digital with your advertising or hire influencers to effectively market your company.

The eighth edition of Entrepreneur's comprehensive, best-selling Start Your Own Business guide entertains new topics such as those mentioned above along with a treasure trove of information on when, where, why and how to start and run a successful business.

In this excerpt we discuss what's really worth heeding from the investors on Shark Tank. — Rich Mintzer

Related: How Do I Know If I Have a Great Business Idea?

By now, nearly everyone who has dreamed of becoming an entrepreneur has seen at least one episode of Shark Tank. Over the years many hopeful small-business owners have pitched their products and ideas to a panel of "shark" investors, led by business leader/entrepreneur Robert Herjavec and billionaire Mark Cuban. The sharks have invested in more than 225 businesses, and they've made many additional offers on deals that were never closed.

Just being on the show can boost the presence of a small business. But pitching investors in real life isn't like the pre-screened and rehearsed process you see on TV. However, there are lessons you can take from the demands the sharks make of the entrepreneurs — ones that will be useful in securing investors the traditional way. Here are six big ones.

1. The 10-second rule

The first 10 seconds of your pitch will set the tone and the impression investors have of you and your idea. Practice, practice, practice.

2. Be clear and concise

People who fail to get money or attention from the sharks typically lack clarity about their ideas and real conviction that they can succeed. Project clear goals, plans and projections, and make sure your passion comes through.

3. Know the problem and the market

The sharks are notorious for homing in on the problem a business is trying to solve and how big that problem is. That helps determine the likelihood of success. You don't need a product that's going to solve a worldwide problem to have a good idea. If your business solves a problem that has a significant market and you have knowledge of that market, and a means of reaching them, you can make a strong impression. Be clear when you speak to investors about this.

4. Do the math, and do it well

Know the costs of making your product or running your business compared to the profits. Understand and be clear about your margins. Know the overall market size and a realistic share you can capture. Know what you plan to do with an investor's money. Commit all this to memory — and be able to back it up.

5. Be prepared to answer questions

Review your business plan, and be prepared to answer any possible question they could ask. Whenever contestants on Shark Tank fumble their way through an answer, the sharks start circling, and you know that contestant is most likely heading home without an offer.

6. Be willing to listen and learn from feedback

On Shark Tank, the sharks almost always offer smart lessons, although they're often in the form of criticism or tearing apart (as sharks would) an idea they deem unworthy of an investment. If potential investors criticize or decide not to invest, listen for the advice in that criticism, and don't be afraid to ask for feedback about what would have changed their minds. Use that to improve your pitch.

Related: What to Know to Run a Successful Family Business

Kenny Herzog

Entrepreneur Staff

Digital Content Director

Kenny Herzog is currently Digital Content Director at Entrepreneur Media. Previously, he has served as Editor in Chief or Managing Editor for several online and print publications, and contributed his byline to outlets including Rolling Stone, New York Magazine/Vulture, Esquire, The Ringer, Men's Health, TimeOut New York, A.V. Club, Men's Journal, Mic, Mel, Nylon and many more.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Business News

Melinda French Gates Announces Open Call for $250 Million Fund. Here's Who Can Apply.

The fund is part of French Gates's $1 billion philanthropic plan.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Daniel Lubetzky Took Kind Snacks From Idea to $5 Billion. Here's His Best Advice For Anyone Who Wants to Start a Business.

In an interview with Entrepreneur, Kind Snacks founder Daniel Lubetzky tells aspiring business owners not to follow someone else's path to success — even his.

Business News

JPMorgan Chase CEO Jamie Dimon Isn't Worried About AI Taking Over Jobs — Here's Why

Dimon said AI was part of the next wave of tech innovation.

Business Plans

How to Master Your Strategic Planning As You Prepare Your Business for 2025

Here's how to best think about strategic planning, communication rhythms and maintaining alignment for consistent growth as you plan for next year.