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One of the popular shows these days, which has benefited a lot of would-be entrepreneurs, and has obviously got us hooked onto it as well – Shark Tank! This show has everyone talking about it, be it financial experts, or even social media. So what exactly is this show all about? Shark Tank is a show where aspiring entrepreneurs get an opportunity to make their entrepreneurial dreams come true. In this show, entrepreneurs have to try persuading the seven judges into investing capital into their business ideas by presenting their business model. Though this show has come to an end, it has left behind some important lessons on money management.
1. Knowledge of Finance
Whether you run a house or run a business, the basics of finance are crucial in both. One cannot be non-conversant about a subject like finance that is essential in every aspect of life. If you are keen on becoming an entrepreneur or even setting up a small business from your house, you must be well aware of the meaning of terms like net profit, revenue, margin, etc., as well as how finances need to be managed. This will definitely be helpful in making wise decisions and you might also end up saving on unwanted expenditure.
2. Staying Invested for the Long-term
You might have observed that, on the show, judges normally grill the contestants on their long-term plan for the start-up and they try to understand if the business will be able to survive in the long run. Considering the level of competition these days, be it in business, or any other field, this is a crucial aspect. It is important to have adequate capital that will help you sustain yourself in the long run. Every business comes with its unique management strategy, set of assets, and long-term plan. Similarly, any investment is beneficial if you stay invested in it for the long-term, at least a minimum of 3-5 years.
3. Calculating and Understanding Risk
On the show, every judge comes up with a unique offer to the business they find interesting. One shark might not accept a low stake in the company and may even refuse to deal with that specific business, whereas another shark may accept a low equity stake. The acceptance or non-acceptance of the deal depends on every sharks’ perception of risk. It is essential to understand that every company is different and while some companies might require a high investment, some may not. Similarly, just because your relative has invested all his funds in a specific investment option and has benefitted from it, it isn’t necessary for you to follow the same path. Analyze your resources and risk before you invest your funds in anything – investment option of business.
4. Understand company financials
Company financials seem to be quite complicated to the common man and many a time we invest our money in certain firms without even glancing at their financials. This sheer lack of insight might lead to losses in the future. This is quite apt when it comes to investing in mutual funds or even equities in the stock market. Always go through the financials of a company, past performance, history, current performance as well as any current news on the company. This will help you make wise decisions related to your investment and avoid investing in companies that will pull your finances in a downward trend
5. Clarity
This is one such quality that every individual must have, be it in their Personal life, financial goals, or investments. One needs to jot down their Short-term and long-term goals and get into budgeting as early as possible. If you want to see your wealth increase with time, it is essential that you Are clear about your goals, have clarity on your investment options, risk Tolerance levels, income, expenditure, etc. Having clarity in these areas Will definitely help you invest your resources well and also ensure you get good returns. It is time to prioritize what is important and divert a portion of your income towards long-term as well as short-term investments that Will help secure your future.
6. Do not hesitate to seek assistance whenever required
When in doubt, seek help. Many of us try to learn everything possible about investments, investment options, and ideas via the internet, as Google has taken over every possible search query of ours. However, not all ideas and assistance provided online might be in sync with your requirements, risk appetite, income level, and goals. Whenever you are confused regarding any form of investment, it is better to seek the advice of those who are well-versed in these areas; it could be your family friend, relative, parent, or even a financial advisor. A financial advisor would be in a better position to guide you well when it comes to investments, be it insurance, mutual funds, stocks, etc.
To sum it up, Shark Tank is a show that not just helped budding entrepreneurs, but also entertained us and helped us understand more about the business and financial world, irrespective of whether you are an employee with a private firm or a government employee, or a housewife or an entrepreneur. Hope these lessons help you manage your finances better!
