“Shark Tank” investor Kevin O’Leary (also known as Mr. Wonderful) wants to help entrepreneurs survive and thrive, especially during the pandemic. Read on for his advice on finding brand purpose, managing capital, and tapping into your business passion.
What are the top challenges facing small businesses today?
Figuring out how to sell directly to their customers — how do they form direct relationships with them? And this isn’t happening just in the United States, it’s happening all around the world. The pandemic has forced us to work remotely but also connect directly with our customers wherever they are.
That is the challenge and also the opportunity, because one of the upsides of this direct relationship is when you sell through retail, you basically make 50 cents on the dollar because you have to pay the retailer and the distributor, and other costs associated with transporting a product to multiple locations before it’s in the consumer’s hands. That’s not the case in direct-to-consumer. You basically get 100 percent of the margins if you can acquire the customer and ship directly to them.
So there’s a tremendous upside for business in terms of digitizing and it’s happening all over America today.
What is your advice to small business entrepreneurs looking for their brand purpose?
The key is to have a mission. What is the reason you’re starting the business? Why are you doing it? Who are you helping? And what are you giving back? These are the questions every consumer has today.
Sustainability is becoming a very important message in terms of brand awareness. Consumers prefer companies that solve problems and also give back to their communities, or provide sustainable solutions; because so many consumers are concerned about the environment today and sustainability, if you totally ignore that, they prefer other brands.
And so we see this all the time, companies like Blueland, in my portfolio, that is concerned about plastics and so much plastic being wasted, came up with a solution to clean fluids and detergents, they crystallize them and they deliver these products now in crystal form in a new, unique way. Instead of buying a heavy plastic jug of single-use detergent, here it is, in a crystallized form you simply drop this into a usable bottle. And bingo, you’ve got cleaning fluids. You’ve got surface cleaning, you’ve got this detergent.
That’s technology, but it’s also sustainability. This company is doing really well because it solves a huge problem. That’s Blueland and I love companies like that: They have a mission and they also have a solution, combining those two builds great brand value.
Do you have any recommended steps for entrepreneurs to obtain and better manage their capital?
You have to know your numbers because there’s no other way to measure the success or failure of the business without knowing the numbers and watching on a monthly basis. What are revenues? What are cash flows? What are expenses? If you’re not good at that, it’s very important to bring somebody in, early on, that is.
Not every entrepreneur is skilled at accounting, and you don’t have to be to be successful. Maybe you’re a great marketer, maybe you’re a great production and logistics person. There are different skills that matter to a business, particularly when it’s growing, but understanding the measuring tool of business, which are the numbers, you have to have them at your fingertips, you have to see where your revenues are versus forecast, your expenses versus forecast. If you don’t have that information, it’s a sure way to go bankrupt.
But I’m just saying you can find people with those skillsets, so knowing your numbers means you have to know them, but it doesn’t mean you have to do the work. You just have to find a partner that’s good at it. Building teams is what building businesses is all about. Finding the right people in the right positions, including who’s running the numbers, who’s doing the accounting, who’s dealing with the finances, is very important.
What are your top tips for turning passion into a successful career in a pandemic?
I’ve had an opportunity now for the past few years to lecture at places like Harvard, MIT, Notre Dame, Temple, Waterloo, and McGill. I teach graduating cohorts of engineers, because a third of those classes are going to become engineers. I tell everybody the same thing: make sure that’s the journey you want.
The journey of entrepreneurship is very, very chaotic, tense, and volatile. It’s not for everybody. But if it’s the journey you want to take, realize that it’s not a life-balance situation. You’re going to have to work incredibly hard for some period of time, because there are people all around the world who want to kick your ass. It’s not a domestic competition anymore, it’s a global competition.
Somebody else is willing to get up earlier, work an hour later, just to steal your market share from you, that I can guarantee. But the real pursuit of entrepreneurship has nothing to do with money. Really nothing. If you’re in the pursuit of greed, of money, you’re going to fail.
Entrepreneurship is the journey. And this is the passion of it for personal freedom, to be able to control your own destiny, your own time, your own pursuits. And if you are successful, to have the financing ability to pursue things that matter to you for the rest of your days.
I work because I want to, I work because I enjoy it. I do the things that mean something to me because I’ve earned it. I’ve worked very hard to get here. And that’s what I tell people that are entrepreneurs. If you’re going to take that journey, now you’re going to work, 110 percent harder than anybody else, but you’re doing it for a reason.
There will come a time where you don’t have to work at all, and yet you’ll want to work even harder. That is the definition and the passion of entrepreneurship, and I wish it for everybody because it’s a wonderful outcome for your career — if you’re willing to do the sacrifice.