Starting and running any business means hard work and a daily fight against the daunting odds of failure. For businesses in small towns that lack the talent pool and resources of bigger cities, the obstacles can seem insurmountable. But Shark Tank star Robert Herjavec is optimistic that there are ways to help such companies stay in business, and to revitalize the communities around them.
This past summer, the millionaire investor filmed an online series, Small Business Revolution on Main Street, in which he helped six small companies in Wabash, Indiana, overcome their biggest challenges. The town was selected through a contest, winning mentorship for its businesses from Herjavec and executives from marketing firm Deluxe Corporation, as well as $500,000 for marketing and support. At a screening event of the premiere in New York City Tuesday, Herjavec touched on some of the most important lessons small businesses can glean from the series.
1. Know your numbers
"To a lot of small businesses, including me when I started, the numbers were like a jigsaw puzzle," Herjavec said. "I kind of knew what revenue was, expenses, cost of goods, but I couldn't put those pieces together into a picture that made sense." Similarly, many of the businesses on the show were closely monitoring their revenues but didn't know how to keep track of profits. Without a firm grasp of where your company stands financially, it is difficult to make changes when necessary, Herjavec said. Plus, if you don't know the language of accounting and finance, "someone is going to take advantage of you, or you're going to be left behind."
2. Engage in smart marketing
"We see a lot of small businesses that are jumping to Snapchat and Instagram and getting business that way, but email marketing is oftentimes overlooked," Herjavec said. Deluxe chief brand communication officer Amanda Brinkman, who mentors businesses in the series alongside Herjavec, said that 87 percent of consumers prefer to be engaged via email. It's far easier and less expensive to sell to existing customers than to acquire new ones, Herjavec added, so maintaining a robust customer mailing list is a good way to increase your revenue at a low cost.
3. Ask for help
Many of the small-town businesses on the show were surprised they had access to (and could afford) some of the same outside resources as larger competitors for things like marketing, branding, and accounting. "You have to let go of the small-business mentality to be able to take the next step," Herjavec said, explaining that the penny-pinching habits of most small companies can only get them so far. "When you start with nothing, it's hard to let go," he added, but appealing to experts instead of trying to figure everything out yourself is necessary for growth.
Herjavec concluded that the success of the companies on the show--and any small business--depends on how they make use of their newly acquired knowledge and resources. "What we found after eight seasons at Shark Tank," he said, "is the businesses that continue to be successful are the ones that looked at our money as the start and not the goal. And it's the same here."
The contest is now open to choose the next small town for the 2017 Web series. And if you represent a small town in Hawaii, Herjavec is rooting for you.