Focus on these things to be successful in business.
- shark tank Investor Kevin O’Leary, aka Mr. Wonderful, has grown his net worth to $400 million by following key investing principles.
- You learn how to cut your losses so you don’t lose even more money.
- By knowing when to pull the plug, you can conserve your capital and focus on investing in your profitable businesses.
As a star of CBC’s The Dragon’s Lair and ABC’s shark tank, Kevin O’Leary has earned a reputation as a stern but fair judge of business proposals. He’s also a successful entrepreneur himself, with interests in everything from software and wine to mutual funds and hockey. In other words, he knows a thing or two about what it takes to start and grow a successful business. Here are five of his top tips for anyone looking to do the same.
1. Do your homework
“Money may go to bad people, but it never goes to bad ideas,” says O’Leary. This means that you are doing your due diligence. You need to know everything about the market, the opportunity, the competitive landscape, and your team. “If you’re talking about something like a hot sauce or a food product where the chance of getting shelf space is pretty much zero, that’s not really interesting to me. I tend to focus more on the product, the service, the market and of course the people. But right from the start, if it’s an overly competitive space: that’s a huge downside.”
That means taking the time to understand your industry inside and out, identifying potential risks and opportunities, and building a strong foundation that you can expand on as your business grows. Know what works and what doesn’t and be ready to move on.
2. Be frugal
O’Leary is famed for his no-nonsense approach to business, and the same goes for the way he runs his own businesses. “Never waste money in the start-up phase,” urges O’Leary. This may mean you have to make some sacrifices in the early days – like working from home or giving up fancy office space – but it will pay off in the long run if you can invest those savings back into your business.
O’Leary explains that most companies fail because “their growth projections are wrong. Their revenue projections are wrong and they’re running out of money; that’s why 8 out of 10 companies fail.” Being frugal and paying attention to your cash flow is critical to success.
3. Focus on selling
“Whatever you pay attention to, grows. Don’t waste your time and money,” says O’Leary. “The most important thing for a startup company is to focus on sales, that’s what the first two years are all about.”
“If you’re not willing to do that work – get up in the morning with a small business and start generating income, then you’re not going to be a successful entrepreneur. It’s that simple.” Ultimately, the revenue will fund your growth and allow you to expand your operations. So even if you aren’t profitable at first, as long as you bring in money, you’re on the right track.
4. Knowing when to stop
One of the most important decisions you will make as an entrepreneur is when to part with a failed business. “If you can’t make money after 36 months, it was a hobby, not a business,” says O’Leary. Don’t be afraid to cut your losses and move on to something new. “If you don’t know how to pan, you go to zero.” It may be painful in the short term, but it will save you a great deal of time, money, and heartache in the long run.
5. Build a great team
Surrounding yourself with talented people who share your vision is one of the keys to success in business—and in life. “I wouldn’t be where I am today without the amazing team I’ve built around me,” says O’Leary. “Find people who are smarter than you and who complement your skills.” That way, you have the best possible chance of achieving your goals—whatever they may be.
Starting a business isn’t easy—but with hard work, dedication, and these five tips from serial entrepreneur Kevin O’Leary, you’re well on your way to building your own successful business!
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