When it comes to starting a viable venture, it’s hard to separate the business idea itself from the end goal of making money. Yet that’s exactly what Shark Tank investor Daymond John would advise you to do.
“The entrepreneurs I see that are successful are not doing it to make money,” John told the US Chamber of Commerce. “They feel that there was a problem that was not being addressed on the market . . . [and] said, ‘I have to solve it.’ They’re almost always doing it for somebody else.”
Still, before any new business gets too far off the ground, securing the proper funding is going to be an integral part of the process. Achieving the goals of a new business, whatever they may be, will never be reached if the necessary funding is not generated to keep things moving until the business becomes profitable.
Entrepreneurs and small business owners can tap directly into John’s business acumen as the FUBU guru will be the keynote speaker at the inaugural Inventory Management + Growth Summit on September 28. Powered by Fishbowl, the leading inventory management system for QuickBooks users, the free summit will feature John sharing personal tips on business growth and scaling.
For now, John has offered these funding strategies for those considering starting a new business:
Sell Your Dream
Speaking from the standpoint of an investor, John encourages entrepreneurs to exuberantly showcase their passion for their product or business.
“Tell us a story and make us feel like this train is going to leave the station,” John says.
He strongly advises entrepreneurs displaying an infectious attitude. “When real people who are going to succeed regardless are pitching you, they’re just telling you the story. You want to get on the ride? That’s up to you. But that train is going, as far as they’re concerned,” John says. “You want them to feel like I can’t miss this train. And you have to have a passion, a twinkle in your eye that is so bright, you’ll wake up for the rest of your life, every single day, going to work like it’s a Christmas present.”
Securing funding for your business doesn’t mean you have to find a “shark” to bestow millions of dollars upon you..
“When starting out, do not be afraid to bootstrap,” John says. “That’s what I did. I started out with $40. But make sure you take affordable steps and start with a small budget.
“Crowdfunding, grants, angel investors and loans are all options to consider,” he continues, “but it’s up to you to decide the best option for your business.”
Search Available SBA Loans
Entrepreneurs should visit the US Small Business Administration site and check out what loans may be currently available to qualified applicants. The website can often match small business owners with loans to get them started, John says.
Benefits of SBA loans include competitive terms, continuing counseling and education, and unique benefits, such as lower down payments, flexible overhead, and no collateral.
Know Your Target
Like any successful partnership, when soliciting funding, you must first do your due diligence in learning what makes your potential benefactor’s business tick. “Know every single thing about that target.” John says. “What is their need? [Can you] complement something they currently have in their portfolio?”
John also suggests focusing your energy on those who could benefit the most from a potential partnership. “Don’t pitch the biggest player,” John says. “You want to pitch No. 20, because 20’s sucking wind. Find out what’s keeping that person up at night.”
Find a Mentor
When he first founded FUBU, John was in such a rush that he set unrealistic expectations on himself and his company, noting that he eventually realized that “every overnight success is five to 10 years in the making.”
Ironically, one of the best things new entrepreneurs can do is find trusted mentors who have no financial investment in their startup.
“From my experience,” John says, “the best thing new entrepreneurs can do is get a mentor who does not have an investment in their business. You can’t be wise beyond your days all the time, so a lot of time, it helps to find mentors.”
No matter how good a product or new business may be, whether John chooses to invest or not always comes down to his connection with the person making the pitch. “Show them they’re going to make money,” John says. “[But] then it’s the person. It’s always the person.
“You want to look at somebody you’re going to invest with as someone you’re maybe going to speak to everyday for the next 20 years.”
Sound advice from someone whose self-started company FUBU has sold more than $6 billion worldwide and who continues to invest in projects that excite him on ABC’s Shark Tank. For more of John’s advice on how to successfully grow your business, check out his keynote presentation at Fishbowl’s free Inventory Management + Growth Summit.