Key Advice for Entrepreneurs from Kevin Harrington
|An entrepreneur has a certain area of expertise, but they need to fill in the gaps with other strengths that are needed to build their business.|
|What key advice would you give entrepreneurs starting out today?|
| I would give an entrepreneur several significant pieces of advice. The first thing they need to do is surround themselves with a team. They need to position their enterprise as more than just their own skills. An entrepreneur has a certain area of expertise, but they need to fill in the gaps with other strengths that are needed to build their business.
For example, if an entrepreneur is both a specialist in marketing and a great salesperson, they’ll need finance people and operational people providing support, in addition to their strengths. Sometimes an entrepreneur is too cocky and tries to do things all by themselves. Getting the wisdom of a board of advisors, and a team to surround the entrepreneur with, is always a good way to plan for success.
|As a follow-up to that, do you have any advice as to how an entrepreneur can begin finding a good team?|
| Yes. I believe number one, successful entrepreneurs need to position themselves as key people of influence in the industry, which heightens their awareness and raises their profile. A good public relations program includes building a personal brand by speaking at Chamber of Commerce events, networking at business events and joining entrepreneurial organizations. You can't do it if you're just hiding under a rock—you've got to make it happen. Speak, present, network, get yourself out there and don't leave any stones unturned.
There's a step-by-step process you can actually follow. I call it “becoming a key person of influence,” and I have a whole program on how to do that. Bottom line, it's raising your profile in a significant fashion where people are going to want to be involved with you.
|What are some of the challenges that you have had to overcome on the road to success, and what did you learn from them?|
| I’ve experienced a lot of challenges over the years, one of which was making sure that I had the proper capital in place to build each business. I overcame that by bringing in the right kind of people to help me where I wasn't strong, which goes back to my first point about building a team.
Before I start a business, I focus on making sure that we have planned it out properly, that it's properly capitalized, we've got the right projections and the right capital in place to build it with. If you have a great idea that’s very timely in the marketplace and it's going to be successful, one of the few things that could happen is that you don't have the capital to execute it or the right team to help you execute it. Having a team and being part of the team—in addition to being financially prepared—are keys to success.
|Many businesses fail that had plenty of capital, but they didn't utilize it. Utilizing capital in a proper fashion is an important step.|
|What are some of the main reasons why businesses fail?|
| One of the main reason businesses fail is not having the right capital. Many businesses fail that had plenty of capital, but they didn't utilize it. Utilizing capital in a proper fashion is an important step. For instance, don't put it all into buying a building or buying equipment. Make sure that you have a marketing budget, and all the different necessary budgets and allowable reserves needed across the board.
I think a lot of people also fail because they don't budget enough for marketing and public relations, getting customers in the door. I see a lot of people who came on Shark Tank, and I'd ask, "OK, so you won a $100,000, what's the use of proceeds? What are you going to use the money for?" A lot of times, they forget to talk about how they're going to get the customers in. They're going to do all the things to get the business and up and running, but what about the marketing? What about getting customers in the door?
So, there are lots of things that happen across the board that can cause failure. I think not using proceeds in the proper fashion is probably the biggest example of failure.
|Would you give us three important personal traits you feel are crucial for entrepreneurial success?|
| The first one is you need to be passionate. What I mean by “passionate” is that you wake up in the morning and you believe in what you're doing; you believe it's going to be a success., It's going to be tough to be a successful entrepreneur if you're too much of a doubter or unsure of yourself.
The second trait is perseverance—the ability to go through the ups and the downs. Every entrepreneur has peaks and valleys. And the valleys are the tougher parts, where you dip down and you're at the bottom of the barrel; many people quit at that time. Success means you're going to fail, and you need to be able to deal with that; get up and dust yourself off and go back at it. Winston Churchill says, "Success is the ability to go from one failure to another with no loss of enthusiasm." So I think that's important, to be able to persevere through some of the tough times.
And the third trait is being able to delegate to the right people. A lot of people think an entrepreneur means you have to do a lot of it yourself and you're responsible for everything. But this gets back to the teamwork principle that I talked about earlier.
Sometimes things can take too long to do yourself and you could have hired somebody to do it, allowing you to focus on the important things: bringing in the deals and building the business. I've seen too many entrepreneurs who want to do it all themselves, afraid to delegate because they think someone else will mess it up. A good entrepreneur can delegate their success principles to somebody else. In other words, be prepared to delegate and franchise your talent skills.
|On Shark Tank, what were a few of the main factors you were looking for when investing in a new business?|
| The first thing that I looked for was something unique in the business. Was it a product, business or service that was unique? Or, did the business solve a problem? Did the product solve a problem that no other product solved in a similar fashion?
Secondly, I look for the talent behind the company. In many cases, I could see that maybe there were some shortcomings with somebody, but I could support that with a solid team. I wanted to make sure that we had a good base of talented people that had a good track record.
A third factor I looked for in businesses on Shark Tank was experience in the industry. For instance, if this was a person that had a corporate job for the last 30 years, and they're coming on Shark Tank looking for funding for their first entrepreneurial experience, that might not have been the kind of deal I'd be interested in. Does the entrepreneur have a track record that's worth taking the risk for?
And the other thing is, did they do a thorough business plan, competitive analysis and marketing plan? Was there enough planning done?
Another factor that I looked for was: did they do enough studying of the marketplace? Do they see the product’s opportunity, the competition that's out there and the marketing opportunities? How are they going to do it? Sometimes people were shooting too much from the seat of their pants and didn't have enough planning in place.
|Once you're into a business, when do you know it's time to cut ties and move on from that business venture?|
| I'm a numbers guy, and so I analyze. In most businesses, they make money by acquiring customers. So there are a couple of metrics to look at:
If you have both of those numbers, and the lifetime value of your customer is not greater than the cost to acquire the customer, you may be in the wrong arena. In other words, if it cost you $100 to acquire a customer but the lifetime value is $50, then you're not going to make money. You can’t make that up in volume.
If it cost you $100 to acquire the customer and the lifetime value of the customer is $500, then you've got light at the end of the tunnel. Your acquisition cost is 20% of your lifetime value.
When it gets down to making a decision, you've got to do some kind of analysis and due diligence and look at the numbers. Usually, in my world, it boils down to that kind of analysis—looking at the acquisition costs versus lifetime value of the customer. If it doesn’t make sense, it may be time to move on.
|It’s important to create milestones along the way, making a step-by-step process. Don't make the steps too big. Define the steps that you must reach so that you're accomplishing goals along the way.|
|What kept you going at times when you wanted to give up?|
| There is an inherent passion that I've had as an entrepreneur. Maybe something that's innate inside an entrepreneur. It's the challenge factor. It's the factor of proving to yourself that you can do it. In many cases, an entrepreneur has been told that they are not going to be successful. Bankers will tell you, you're not going to be successful. Your wife may tell you. In my case, when I first started, it was my mother telling me I couldn't be successful. And so, I set myself up to succeed; failure was not an option.
It’s important to create milestones along the way, making a step-by-step process. Don't make the steps too big. Define the steps that you must reach so that you're accomplishing goals along the way. If the challenge is too big then you might not make it, but if you've got smaller steps planned to help you get you there, try that. Stay strong and be passionate!
Also, look for advice and turn to mentors. I'll ask a mentor, "Hey look, this is where I am, this was my plan. This is how I'm executing it, so tell me... Do I still have the ability to get there?" Sometimes a mentor can give you just that vote of confidence of, "Yes! You are this close to getting there."
I meet with people on a regular basis who are looking for that little piece of advice, and occasionally I have to tell them, "Hey, look, this is not going to make it. I recommend you stop." But more times than not–say eight out of 10 times–the mentor will say, "Yes, you are going in the right direction. Keep doing what you are doing and you will achieve success."
|If you want to build a small business you can do it on your own. If you want to build a big business, you need to get a team behind you.|
|You mention having mentors is important for entrepreneurial success. Over the years, are there any pieces of advice that your mentors have given you that you’d like to pass on to others?|
| One of my mentors built his business in human resources. His whole focus with me was always building the team. He would tell me, “You need to surround yourself with some experts, people that you can rely on to help you get the job done because you can't do this all by yourself."
I think that's probably one of the overriding factors that I've mentioned here today, which is vital to achieving ultimate success. If you want to build a small business you can do it on your own. If you want to build a big business, you need to get a team behind you.
Here is a very powerful piece of advice my mentors have given me: "Do you want 100% of a small pie, or would you like to have 95% of this huge pie?" Give up 5% of the company if you have to, by bringing in some key top people, and continue building upon the strengths of the rest of the folks that you brought in.”
|What are some of the main projects you are currently working on? After all your successes, what are some of your main passions now?|
| In my industry, I've been an "As Seen on TV" guy for the last 30 years. TV viewership has dropped by 50% in the last 12 years, which drives the question: where is the next platform?
This has driven me to focus on the next platform. I have shifted gears and I'm moving from the world of television to the world of mobile. Mobile is the next platform because that's where the kids are, the future generation. In a few years—some people are saying five, some people are saying ten—television is not going to be what it is today. People are moving towards other viewing habits, so I'm focusing on mobile.
On that note, I have a new mobile venture that I'm launching with Sprint. We are setting up a marketing venture to their 55 million customers, and that's a new thing for me. So the "As Seen on TV" guy is going mobile. I'm launching the world's first mobile shopping channel and it's called Star Shop.
To bring Kevin Harrington to your organization to inspire excellence and successful entrepreneurship in your business, please contact Michael Frick at: Mike@Speaking.com.