Entrepreneur Barbara Corcoran Offers Tips from the Top
NEW YORK CITY — Barbara Corcoran is an entrepreneurial, small business success story, having made millions from her real estate firm, The Corcoran Group. She is currently a panelist, or "Shark", on ABC TV's "Shark Tank".
Question: Please give me your history of being a business owner, in two sentences.
Answer: I grew up in Edgewater New Jersey. I got a $1,000 loan from my boyfriend, I took that money and started a small brokerage firm in New York City called the Corcoran Group, and then I sold it 35 years later for $66 million dollars. That's the happy ending.
Q: What lessons have you learned along the way?
A: Every great entrepreneur that I've ever met is passionate. And I'm not just talking about the kind of passion to start a business — everybody is extremely excited at the starting gate — I'm talking about the kind of passion that gets you through the rough spots.
And you know what I've learned? I've learned that the great, great people that succeed are not any better at taking a hit, which you get along the way. I've learned that the dividing line between the really great entrepreneurs and those that are not quite as successful is not so much how many hits they take in the gut along the way, but how long they take to feel sorry for themselves.
And let me tell you the great entrepreneurs don't spend a lot of time feeling sorry for themselves.
Passion that weathers the storm, that's a key quality in every great entrepreneur.
Q: What else have you learned from the entrepreneurs you've met over the years?
A: Great entrepreneurs at times look like they're winging it, like whatever they are doing is second nature. Don't be fooled by that cover. Let me tell you, everyone I know that succeeds wildly over-prepares for everything they do. They work the four hours on something versus the one hour. Every great entrepreneur does their homework.
Q: So if I'm a small business person, and I'm thinking of opening a puppy day care in Manhattan, what should I do first, before I even consider looking at locations, or consider looking for finance?
A: Before you even think about opening your business there is just one assessment you ought to be making, and that is "Does the world really want it?" And you don't go to your friends, or your family, to tell them about this incredible business idea, go to your mother-in-law who can't stand you, or somebody else who has never liked you. They'll tell you the truth.
If there's no demand for that product, go and think of another one.
Q: How important is location, for retail or any small business owner?
A: It's always easier to succeed in a great big city, simply because there is more opportunity, more customers that you can hit, different kinds of people. So if you can possibly pay the higher rent and get into a town where there is a huge demand for everything, you're always going to have an easier time building a business.
I was so lucky to start my business in New York City. It's the kind of town that doesn't really give a damn who you are or where you come from, all it wants to know is "What can you do for me lately?" So if you can get yourself into a big city like New York, your chance of success is twice as good. And it's worth the extra buck or two you're going to pay in rent.
Q: How important is location within the city? Should I pay the high rent in high traffic neighborhoods, or save that and put it into my business?
A: Every neighborhood is different and has a different clientele. That is what is magical about New York — it is like a town of many mini-towns, but it never pays to go to the high rent district unless you are a high rent type product and you need to hit those people on the street in a retail location. Other than that, you want to keep your overhead as low as you can go because you want to save every penny when that business is new and the worst place to spend it is in high rent.
However, if you are a retail business, the first priority should be paying the premium rent so that you can get those customers tripping on your front door. But if you are a behind the scenes business like an accountant or an attorney or a shoemaker, you should buy the cheapest space you possibly can. You'll need the money for other stuff.
Q: What did you do to set yourself apart from other realtors when you started out?
A: When I started the Corcoran Group, it was a little tiny business in a world of giant businesses. And how did I succeed and get to the head of the pack? I had a gimmick. I created the Corcoran Report, which simply reported on sale prices in Manhattan every six months, and you know what that got me? Free publicity. A lot cheaper than paying for advertising.
So every time anything was written about real estate they came to me for statistics, and my name and my company was always quoted. Don't overlook the power of publicity in building a brand. It's there for the taking.
Whether your business is dogwalking or making photocopies or making children's buttons for clothing, become the expert. It's the quickest way to get to the top.
Q: How much attention should I pay to the competition?
A: I have a theory about the competition. You should ignore it. Because while you're watching them, you're not watching your own business. Just plug on ahead with whatever you're doing, and let them watch you.
Q: How important is customer service?
A: We live in a world where customer service actually feels like an extra, because people don't get enough of it. If you can simply treat the customer truly from your heart ... you will get repeat business. And repeat business is the name of the game.
If you can deliver exceptional customer service, it means those great customers are going to be coming back, and bringing their friends with them.
Q: What do you say to business owners out there who are struggling, who might be wondering every day whether this is the day they will have to close their doors?
A: There probably wasn't a 5-year period that I went through when building my business when I didn't know I wasn't going out of business. Because real estate was going up and down and I owed money, and I didn't know how to pay it, and I was overextended. If you are thinking you are going out of business you can think it, but what you have to do is try one more creative thing to see if you can stay the course.
I thought I was going out of business many times, because the real estate business goes up and down, the peaks and valleys, but in one of those valleys I had the best idea ever, when I was at death's door, in a real estate recession, which was to lump 88 apartments together, and divide them by 88 and price them all alike.
Studios, one bedrooms, two bedrooms — and all in different buildings owned by an insurance company. And you know what happened? It created a rush of demand.
I made a million dollars in two hours. And the day before I thought I was going out of business.
You know what's great about being at death's door? You have nothing to lose and nowhere to go but up. It's the single best time to take an extreme risk.
Q: How do you know when to expand, and when to hold back?
A: My mother had 10 children and she said it was never a good time to have a baby. Go figure that one out. And let me tell you, in building a business, it's never a good time to expand. The best time to expand is when times are bad, because all the big competitors are laying low.
It's always when I moved ahead.
In good times I tried like crazy to move my business ahead, but the big guys with all the fat wallets were outspending me, outmaneuvering me, outmarketing me, but when the bad times hit and they went to sleep at the wheel, that was my heyday and that's when I worked my way up the ranks.
The little guy always has the corner in creativity, when the big guy has the corner on money.
Bad times are good for little guys.