Barbara Corcoran: 5 Questions To Ask Yourself Before You Start a Business
Written by
Paige Cerulli
Edited by
Cory Dudak
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Starting a business is a big decision, and making the transition from being an employee to a business owner can feel overwhelming. Barbara Corcoran, founder of real estate group The Corcoran Group, entrepreneur and “Shark Tank” investor, discussed the process of starting a business on her Q&A recording.
She presented five questions to ask yourself to make sure you’re ready before you start a business.
Are You Okay Working By Yourself?
Going from an employee position to an entrepreneurship role is a major change, and chances are that you’ll initially spend a lot of time alone until your business grows. Corcoran recommended that potential entrepreneurs think carefully about whether they’ll be comfortable working independently.
“A lot of people are not okay working by themselves,” she explained. “You have to know your personality.” If you’re used to working on a team, how will you feel when the team is gone and you’re fully responsible for not only yourself, but for the entire business you’re building? Entrepreneurship can be isolating, especially in the early stages.
Where Am I Going To Get Clients?
Your new business’ success will depend on sales, so create a plan that outlines how you will get clients. “When you’re starting a business, it’s all about sales,” Corcoran said. She recommended that entrepreneurs identify sources for getting leads for new clients and make a list of those potential leads.
Outlining your lead generation process can also help you understand your potential client acquisition costs and the amount of time it may take you to grow your business.
What Do You Do Differently?
Corcoran emphasized the importance of identifying what’s unique about your business. Once you identify what your business does differently than others, you can use that information as a valuable marketing tool, including on social media.
When it comes to social media, Corcoran encouraged business owners to get creative. For example, the Ben & Jerry’s ice cream brand used crowdsourcing to generate new ice cream flavors and creative names. According to Harvard Business School, Ben & Jerry’s launched a contest in which fans were able to design flavors from scratch and choose a name for their creation. The contest winner’s flavor was featured in ice cream shops the next year. The campaign generated tremendous customer involvement and was a great source of ideas while emphasizing the company’s lighthearted marketing and quality product. “Take a lesson from their playbook and involve people on social media,” said Corcoran.
That focus on creativity can help business owners avoid overspending on paid social media advertising. “Most entrepreneurs put the spending money first and the creativity second, but it really goes the other way around,” Corcoran said. “Creativity is what makes your brand on social media every time.”
Does It Make Sense and Will People Buy It?
It’s all too easy to put tons of effort into developing a new product, only to find that it doesn’t sell. During an interview with Maria Menounos, Corcoran recommended entrepreneurs vet a new product by asking if it makes sense and if people will buy it. Many products fail, so distance yourself from your attachment to your new product and be honest about its chances of success. “It’s a great business if it makes common sense and enough people will buy it,” Corcoran said.
Once you have a product, Corcoran recommended taking it to the street and doing a soft market test. Approach individuals who would be your customer and ask for their reactions to the product, if they would buy it and what they would pay. “You will usually find that two out of three ideas suck,” said Corcoran. However, by doing a soft market test, you can identify which products are likely to be successful and avoid putting money in patenting and trademarking products that are unlikely to succeed.
Are You Ready?
Corcoran cautioned against getting caught up in analysis before ever launching a business. “When you start using your brain to analyze, that’s nothing but a series of stop signs,” she explained. While business plans are certainly important, Corcoran felt that business owners who get themselves out there and launch their businesses have a better chance of identifying solutions to challenges that they arise and successfully building their businesses.
She also explained that while people like formulas and feeling like they’re well-prepared, none of the successful business people she’s known have ever gone to business school. Rather than being book smart, entrepreneurs tend to be street smart. Don’t get hung up on thinking that you need to go to business school or complete business courses to successfully start a business.
“When it comes to business, you don’t have to get it right,” she said. “You just have to get it going.”
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