You may know her as the loveable, warm-hearted investor on ABCâs hit show Shark Tank, but Barbara Corcoran is one tough lady when it comes to growing the young businesses she partners with. After starting her real-estate company with just a $1,000 loan and selling it for $66 million 30 years later, she knows what it takes to make it to the top.
Her advice for young treps? Below, we parsed and boiled down a recent Google+ Hangout she participated in with Teri Evans from Entrepreneur.com. For more from the real-estate mogul, don't miss the chance to see her keynote address live at Entrepreneurâs 5th annual Growth Conference in Dallas Jan. 10. Here are Corcoran's top tips for young treps:
1. No one really knows how to value a business. There are no hard-and-fast rules when it comes to valuation so donât spend too much time worrying about it, says Corcoran. âI get made fun of on the show all the time for overpaying for a business,â she says. âBut I donât give a crap about overpaying if I know Iâm going to make extra money on it,â she says. Â
2. A single product can be the springboard of a business. Despite what fellow Shark Tank investor Kevin OâLeary says, Corcoran believes companies can be built out of a great starter product. "You have to start out with one really good thing," says Corcoran. "You canât start out with a whole shelf full of stuff."Â
The reason? Before a product starts taking a nosedive, smart entrepreneurs will already have invented something new and they will have worked heartily toward reshaping their business, she adds.
3. High energy goes a long way. When she makes an investment, Corcoran has long favored an entrepreneurâs drive and personality over a killer new concept any day. âI donât think anyone succeeds in business without a lot of energy,â she says. âIâm looking for someone I can trust and whoâs going to make it through to the finish line.â
4. Donât get hung up on a written business plan. Many of the businesses Corcoran invests in are very early-stage startups, some with only a loose business model. But, before buying in, she asks the founders to write down how theyâre going to make money, how theyâre going to spend money and how much itâs going to cost.
If theyâre unable to do that, she would never invest, she says. âA business plan can be pretty sophisticated and intimidating and you might need a little guidance on how to write one if you donât have a Harvard MBA or a lot of business experience,â Corcoran says. âYour mouth can be far more valuable than anything you put on paper because youâre standing on your feet everyday, pitching people, getting them on your team and to believe in your product. Thatâs the business plan that counts.â
5. Never underestimate the power of free publicity. When Corcoran needed a way to advertise her fledgling real estate brokerage business she decided to publish a report on the average sales of Manhattan properties. The report was published on the front page of the New York Times and she instantly gained serious industry credibility. âIt looked like I was a big player, when I was just a little fish,â Corcoran says. âI donât know why entrepreneurs wouldnât publish an industry report. Itâs the easiest way to get press.â
6. When pitching investors, over prepare. Corcoran was extremely impressed with the pitch from the founders of Cousins Maine Lobster, a business she recently invested in on the show. In preparation, the two "hustlers," as she called them,Â watched every single Shark Tank episode, jotting down every question the sharks asked. "We couldnât trip those guys up and they didnât sound slick. They were enormously prepared," Corcoran says.
What was the best piece of advice you've heard from real-estate mogul? Leave a comment and let us know.