What Do The Numbers Mean on Shark Tank? | FranFinders

0
341
In two weeks I’ll be attending the open call for Shark Tank in Charlotte, NC. As I get ready for the event, I’m going to cover some topics to help explain how Shark Tank works. Today I’m, going to cover the numbers. You’ve seen the show, the business owner comes on stage, gives their pitch and then the close. “I’m asking for $300,000 for 20% of my company.” As soon as the numbers are out, the Sharks start scribbling on their pads. What are they writing down? They are quickly calculating the valuation of the business. You see some of them roll their eyes on some pitches, due to such a high valuation. What do the numbers mean? Let’s do the math. $300K is 20% of what valuation. That’s basic middle school alegebra. If you take $300K and divide by 20% (0.20) and that will equal $1,500,000. That’s the quick math, now, how did the company come up with a $1.5 Million valuation. Most business valuations are a multiple of the revenue. Of those businesses that use a multiple for valuation, they can range greatly. If the business segment has a multiple of “3” for instance, and the revenue is $500K annually, then the valuation would be $1.5 Million. So, now that you know what the numbers mean, the next time you watch the show, have your pad ready and see if you can figure it out before the Sharks. http://www.FranFinders.com
Previous articleWhat is a Franchise Fee? | FranFinders
Next articleHow to Qualify Real Estate Leads
Star of Discovery Channel’s “Undercover Billionaire,” Grant Cardone owns and operates seven privately held companies and a private equity real estate firm, Cardone Capital, with a multifamily portfolio of assets under management valued at over $4 billion. He is the Top Crowdfunder in the world, raising over $900 million in equity via social media. Known internationally as the leading expert on sales, marketing, and scaling businesses, Cardone is a New York Times bestselling author of 11 business books, including “The 10X Rule,” which led to Cardone establishing the 10X Global Movement and the 10X Growth Conference, now the largest business and entrepreneur conference in the world. The online business and sales educational platform he created, Cardone University, serves over 411,000 individuals and Forbes 100 corporate clients throughout the world. Voted the top Marketing Influencer to watch by Forbes, Cardone uses his massive 15 million plus following to give back via his Grant Cardone Foundation, a non-profit organization dedicated to mentoring underserved, at-risk adolescents in financial literacy, especially those without father figures.