Shark Tank Episode Information
The episode selected for the review is available on YouTube. A trio including two brothers and a friend appeared on ‘Shark Tank.’ Sal, John DePaola, and Anthony Caputo signified the Paint Brush Cover (Barbuti 6). The Paint Brush Cover is created by Likwid Concepts owned by these individuals (“Shark Tank The Paint Brush Cover by Likwid Concepts Update and Original Episode”).
The primary reason that makes the paintbrush cover an attractive product is that many people in the U.S. face the problem of their paintbrushes getting dry. The developers affirmed that painters would be able to continue painting with the same brush as the cover will control the moisture and will not let it get dry. The entrepreneurs feel that they have played a vital role in reviving the painting industry of the U.S.
Accounting Details
The contestants came to Shark Tank as they required an investment of $50,000 for a 10% share in the company’s equity. The cost of manufacturing one unit of the Paintbrush Cover is $0.41. However, the inclusion of packaging and shipping increases the total cost of the brush. It implies that the fixed cost of the paintbrush cover is $1.59. The total cost of the paintbrush cover is $2. The sale price is set at $2.99.
The net income of the product is calculated based on its past sales. The contestants stated that they have already sold around 17,000 paintbrush covers for a total of $35,000.
Income Statement
Sales (17,000 x $2.99) $50,830
Cost of Sales $35,000
Net Income $15,830
The projected sales are estimated to be $450,000 in the first year of its operation (Kahn 8). Moreover, the company will be able to achieve sales of $1,000,000 in the third year of business operation.
Income Statement
Sales (150,500 x $2.99) $450,000
Cost of Sales $310,000
Net Income $140,000
The Sharks were not satisfied in the starting with the business idea as they found the entire idea as illogical and irrational. They expressed that they have got 20 years of experience, but they have never heard of any such product. I completely disagree as certain products in the market are not so popular, but their demand is high.
Best Part of the Pitch
The entrepreneurs elaborated their current business strategies and dealings to spark the interest of Sharks. The entrepreneurs expressed that they are currently selling their paintbrush covers to Wal-Mart. They also told Sharks that they are exporting their paintbrush covers to distributors in six different countries.
The design of the new product is unique that could solve the problems of painters. The investors are interested in those products that have the potential to attract customers and can be sold in different markets. The expected sales of the new product are high, and the business can generate positive cash flows for investors.
The Sharks Bite When
The entrepreneurs stated that they would manage to restock their inventories as they have got a lot of contacts with different distributors. The entrepreneurs articulated that they are confident about their product. They shared the idea that the investment that entrepreneurs seek is small, but they will spend more money in the future if the product manufacturing becomes a successful and lucrative venture.
The new business needs to make sales of its product. The investors have a positive view of the capability of the new product, and they believe that their investment in the business would generate a high return on investment.
Result
When the entrepreneurs managed to convince the business dealers to invest in their project, each of the investors gave offers to them. However, Lori made an offer of $200,000 for an exchange of 20% interest in the company’s equity.
The entrepreneurs found this offer reasonable and finalized the deal (“Shark Tank The Paint Brush Cover by Likwid Concepts Update and Original Episode”). The entrepreneurs and the investor were satisfied as they both trusted each other and were sure that this joint venture would prove to be profitable for them.
Works Cited
Barbuti, Angela. “The Paint Brush Cover Re-Enters the ‘Shark Tank’: 5 Fast Facts You Need to Know.” Heavy, 2015. Web.
Kahn, Steven. “The Paint Brush Cover Update – What Happened After Shark Tank.” Gazette Review, 2016. Web.
“Shark Tank Episode Scrub Daddy Full HD.” YouTube, uploaded by JigglyBoop, 2015. Web.
“Shark Tank The Paint Brush Cover by Likwid Concepts Update and Original Episode.” YouTube, uploaded by The Pain Brush Cover, 2015. Web.