John Paul DeJoria is an inspiration to entrepreneurs. An army veteran, he hustled to make money and his own success. Now the self-made billionaire – his wealth is valued at $3.1 billion – is sharing his tips with entrepreneurs to help them make their business dreams a reality.
Starting out, DeJoria sold encyclopedias, pumped gas, and worked as a janitor. For a while he was homeless. Then, in 1980, he and his friend Paul Mitchell used $700 to launch John Paul Mitchell Systems®, a company for hairdressers, salons, and the beauty industry.
Stay competitive
“We were very resourceful and used the available funds we had to position ourselves as an established brand to attract business,” says DeJoria, chairman of the board for the company. “For example, we had an answering phone with another person’s voice, a P.O. Box, and a custom letterhead with all of our contact information to ensure the company looked official.”
They also initially priced product with only a five percent markup. That gave distributors a discount and ensured they could pay for the product upon delivery, instead of in advance.
“We knew we were successful at the two-year mark when we were able to pay our bills on time and each have $2,000 left over,” says DeJoria, who is 75. “We were frugal with every dime coming in because we knew it had to go right back out. We didn’t have loans, so we were able to build the business responsibly. It doesn’t mean we didn’t lose money, but in most cases, we were ahead of the game.”
Be patient
DeJoria, also a co-founder of Patrón Spirits, says a successful business has services or products that you don’t have to sell. Consumers love your products and will buy them over and over again and tell their friends about it.
He warns entrepreneurs not to advertise until you have the distribution to support the demand for your product.
When DeJoria was selling encyclopedias door-to-door on commission only, he received his best career advice: “Be prepared for a lot of rejection. If the first 100 doors are slammed in your face, be just as enthusiastic on door 101.”
Have passion
He advises aspiring entrepreneurs to make sure they’re doing it for the right reasons.
“You have to be passionate and patient. If you’re prepared for rejection, and you believe your product or service is the best there is, do it,” he says. “If you’re only in it for the money, don’t do it. It was hand-to-mouth for me for two years, but we were passionate and believed in what we were selling.”