Barbara Corcoran: Why Business Owners Shouldn’t Make Their Landlords Rich
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Heather Taylor
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Amber Barkley
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If you’re going to build a big business, money expert and investor Barbara Corcoran recommends buying your space instead of renting it — as early as day one of being an entrepreneur.
This advice comes courtesy of Corcoran’s Business Unusual podcast, where the “Shark Tank” star answers questions submitted by listeners on topics like business, life and how to get through common obstacles. Here’s why Corcoran said business owners can’t give their profits away to their landlords.
The Two Most Important Decisions in Business
According to Corcoran, deciding on the business you’ll go into and how you plan to house your business are the two most important decisions you’ll make as a business owner.
Business owners who are building a business know firsthand that every single dollar counts. Paying for rent can be an especially painful expense because, as Corcoran said, business owners are essentially giving away their profits to their landlord.
“If you’re paying rent, your landlord actually remains your boss, because every time you’re going to expand your business and do a little bit more, you’re gonna find that the landlord is asking for the rent to go up,” Corcoran said.
The faster you can control your real estate, Corcoran said, the better off you are as a business owner.
Why Business Owners Should Start Off With a Tiny Space
Don’t think your first business needs to be housed in a fancy sprawling office. Corcoran recommends business owners seek out the “smallest possible footprint” when they start a small business and scale up as they go, instead. She said this is because many new business owners have too much space to begin with.
“You’re better off buying a tiny little space of your own and building up as you need it,” Corcoran said. “If you can scrounge up the 10% down payment to control your space, you’ll also be controlling your destiny.”
The Benefits of Buying Your Own Real Estate
During the podcast, Corcoran shared a personal anecdote about her early experience in building a business.
Because she was a real estate agent and needed to have new territories to open offices, she was able to buy spaces in a number of cities in New York, including Brooklyn and the South Bronx, before they became hot places to live in. In hindsight, Corcoran said it was lucky to get into these areas early and own the buildings at low prices.
If you can, Corcoran highly recommends business owners buy their own real estate. “You’ll be entirely your own boss, you won’t have your landlord as your unwanted partner and you’ll be making a good investment that’s gonna be worth a fortune one day.”
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