Shark Tank’s Kevin Harrington started his career as a business salesman. Before the famed inventor of the infomercial aired his first Ginsu knife commercial, he purchased small businesses and sold them for a profit.
These days, the entrepreneur, best known for his appearances on Shark Tank, is busy looking for great product ideas and well-built businesses to promote on his advertising channels. He has helped countless companies beat the small business failure rate and bring in millions of dollars in revenue, thanks to his fundamental understanding of what gets a business past those first crucial 5 years.
What Is the Small Business Failure Rate?
Bloomberg data published by Forbes says that 80 percent of small businesses will fail within 18 months of starting, though data from U.S. Bureau of Labor Statistics says the number is closer to 50 percent. The statistics vary, but general consensus tells us that the majority of small businesses will close their doors—virtual or otherwise—within their first 5 years.
You Can Beat Those Odds
Shark Tank’s original Shark, Kevin Harrington, believes that the longevity of a business depends not only on its unique and valuable products but on the people representing those products. That’s not surprising advice, considering it comes from a man who put Tony Little and George Foreman on TV to sell for him.
Assuming that you’ve already built a solid business foundation (website, lead pages, email list, inbound marketing, etc.), the best way to grow your small business into an industry leader is by having amazing outbound salespeople.
Remember, no matter what your product, there is always an alternative out there. So what does your particular company bring to the table for the consumer? Enthusiasm and knowledge. The best people for sales jobs are the ones who can connect instantly with consumers, make friends and create real product buzz. Find these people and get them working for you ASAP.
Making the Switch from Small Business Owner to Big Business CEO
As far as Harrington is concerned, the most important transition your business will ever make is not from startup to established small business, but from small to large.
Typically speaking, a company with more than 500 employees is no longer classified as a small business, though this is far from concrete. The U.S. Small Business Administration says, “a small business is an entity that is not dominant in its industry and has independent owners. The size of a business matters because different laws apply to large businesses … ”
Once you start bringing in six figures, it’s fair to call yourself a large business no matter how many employees you have. The question is, how do you get your company to the point where it’s making that kind of money? According to Harrington, you’ve got to find qualified help.
“If you’re going to take something to the moon, understand it may not happen all by yourself. Especially if it’s the first time out.” The marketing guru suggests you surround yourself with successful business people who can help you along the way. Of course, you’ll have to cut them in for a little of the profit. But when you’re making eight or nine figures, what difference does a small percentage really make?
Kevin Harrington on Building Wealth
“In the old days, I would roll my assets deal to deal, and there are still people in my world that do that. In those days, banks wouldn’t give you money, and you had to finance your own company.”
Fortunately, Kevin’s father was a restaurateur who knew his son shouldn’t be putting all his money into one venture at a time. “He told me, ‘Don’t put all your eggs into one basket.’ He was in the restaurant business but he had other businesses.” This was an important lesson for the TV marketer because in the last 10 years, he says TV viewership has dropped by 50 percent.
Despite this huge market decrease, Kevin feels secure about his financial future thanks to diversification. “You’ve got to build in other income streams,” he says. “If you’re an employee-type person, start a part-time business.” The important thing is never to rely on one source of income. When you diversify your income, it becomes easier and much quicker to build wealth.
Kevin Harrington: after Your First Million, Join the Entrepreneurs’ Organization
Ever wondered where to turn for professional business advice? Top entrepreneurs are always talking about how they used mentors and contemporary networks to help build their business empires, but it’s not always clear how exactly those relationships started. Fortunately, in an interview on Mike Dillard’s Self Made Man podcast, Kevin Harrington shed some light on the subject.
According to Harrington, the Entrepreneurs’ Organization is just the right place for business owners to network. The organization’s website says, “At its core, EO is a collection of like-minded entrepreneurs focused on business growth, personal development and community engagement.”
Says Harrington: “I am an original founding member of EO, which used to be called YEO (Young Entrepreneurs’ Organization).” Originally, the group was only for under-40s, but when the founders found themselves on the wrong side of the self-imposed age limit, they did away with it. “Now, EO is in about 50 countries. It was 1987 when we started it and … I’m very proud to be one of the founding board members and affiliated with EO.”
Why Join the EO?
Kevin Harrington puts it simply, “Create the Dream Team and don’t be afraid to cut them in for a little piece of the action.” To join the EO, you must be “the owner, founder or majority stakeholder of a business earning a minimum of U.S. $1 million in the most recent fiscal year.”
The Entrepreneurs’ Organization was created to help established business owners grow their companies, learn from each other and make a difference in their communities.
Stay Focused and Keep Problem-Solving
Every entrepreneur faces difficulties on the road to success. Whether you’re new to the business world or a seasoned entrepreneur, it’s vital to stay focused on your goals and always stay on your toes. Tackle every problem when it arises, seek out qualified advice whenever possible and stay positive. You can beat the small business failure rate if you make a great business plan, capitalize on amazing products and salespeople and never give up.