Barbara Corcoran expects entrepreneurs to listen to what she says, and then do what they want. Even when they're using her money to build their companies.
Corcoran, now one of the investors on the ABC program "Shark Tank," made her name running New York real estate brokerage Corcoran Group. Over nearly 30 years, she took chances, made some mistakes--and learned how to take risks. She often asked for advice, then grew to trust her own instincts and do what she thought was best.
Now Corcoran expects her "Shark Tank" entrepreneurs, including the owners of food truck operator Cousins Maine Lobster and baker Daisy Cake, to do the same.
"My worst entrepreneurs listen to everything I say and do it that way. My best entrepreneurs listen to me and do as they please," she says.
Corcoran spoke with The Associated Press about Corcoran Group, which she sold in 2001 for $66 million, and her "Shark Tank" entrepreneurs. Here are excerpts, edited for clarity and brevity:
Q. What are the most important lessons you learned about being a small business owner from Corcoran Group?
A. Being a little guy, you have the corner on creativity over the corner on money that the big guy has. I learned that when I was starting the business and in those early years, when I got very intimidated by the fact that the real estate brokerage field was owned by men who inherited the business from their father, and they had access to cash all the time. I felt, how could I compete, how could I beat them at the game? I soon found out that while they were having a new idea, passing it through a committee, vetting it with their attorney, checking out with their accountants to see how much it could cost, I could be out the gate with a new idea, throw it against the wall and try it. That was largely responsible for pushing my company ahead.
I've learned that the most important trait you need as an entrepreneur is, when you take a hit, to not feel sorry for yourself. That separated the men from the boys and the women from the girls. I find that with all the entrepreneurs I invest in on "Shark Tank," the best ones have that trait. When they take a hit, they bounce back and say, "hit me again." Not feeling sorry for yourself is an essential card to have and I don't see people succeed without it.
Q. What are the biggest obstacles facing small businesses?
A. Cash flow, No. 1, front and center. Because if you're aggressive about selling your products, you can't afford to produce them without cash flow.
Getting needed financing. For example, Cousins Maine Lobster, two very aggressive, competent individuals, winners in every way building their business. And they had tremendous sales on one truck in Los Angeles. They needed a second lobster truck. They had half the cash, but couldn't get funding, couldn't get a loan. But now they have 15 new lobster trucks by franchising them.
Q. What mistakes do you see small business owners making?
A. I say this maybe because of my position on "Shark Tank": getting caught up in vanity. They're discovered overnight, they get tremendous orders, like my Grace & Lace brand that sold $1 million worth of socks one night on "Shark Tank." Who saw that coming? Nobody, not me, not them. I have a routine, actually, with my companies. I call tell them how unimportant they are, just to keep their head on their shoulders.
Overextending. A great example of that is Cousins Maine Lobster. They had one successful lobster truck and wanted a second one, and I agreed with them, they could manage it. But then they also opened a restaurant on the side and started an online lobster shop. I was totally against it. They were spread too thin. Did they do it anyway? Of course they did, because they're good entrepreneurs. They don't listen.
Another pitfall is falling head over heels with your product or your idea, being too passionate. It's like falling in love with a hot babe--staying married is the hard part. A business is a work ethic, and means getting up again and again when you fall down.
Q. Do you have favorites among your Shark Tank entrepreneurs?
A. Absolutely, I just don't tell them that. I tell them they're all my favorites. But Cousins Maine Lobster, they're so successful, but they're so young and good-looking and they flirt with me. And, when they send me photos that were taken at various events, they always airbrush me before they send them, so I look their age.
And I would have to say, Kim Nelson (Daisy Cake), has won my heart, because she grew quickly, overextended, got into a lot of financial trouble and then rose again from the dead. It's very hard to come back out of the grave, and she did it.