Barbara Corcoran’s Business Unusual podcast offers real-world advice to anyone running their own business. She’s been there, done that and more. This wildly successful, insightful and entertaining podcast will inspire you to take on your next business opportunity or manage through everyday challenges.
Here are some of the highlights from Barbara’s recent episode where she shares what she learned from her mother, and answers questions about financing your business and securing business loans.
“I surround myself with only positive people for one reason only – I want to be happy!”
My mother, a 1950s housewife, raised 10 kids on a shoe string budget in a two-bedroom apartment, pretty remarkable. Here are five things I learned from my mom that helped me build a huge business:
1. Everyone has a gift
My sister Ellen was good at dishes, and she was also great at making beds. My brother Eddie was great at saving money, and he started working at age 11. You couldn’t get a nickel out of that guy if you begged for a week. But when he was 18, he got on a motorcycle and moved to California with $10,000 in his pocket.
I’m good at spotting people’s gifts just like my mom, and I used that skill to build a hugely successful company. I took advantage of what I saw in people as their gifts and put them into the right jobs. I was constantly making salesmen into advertising executives and convincing bookkeepers they should be salesmen, because I could see the light in them and what they were good at.
2. Everyone has to pitch in and needs to know what their job is
We were a family of 12 people in very tight quarters, and if we hadn’t pitched in and known what our jobs were, we could have never gotten along as we did. Each child had an assigned role in the family, so I gave every employee an assignment when I built my real estate business. Everyone knew exactly what their assignment was, and they understood they had to pitch in if they were going to be part of my company. It was simple and there was an “esprit de corp” where everyone actually felt like they were a part of a family.
When I was building my business, every salesman understood it was their specific job to meet their desk overhead every single month. Their overhead was $48,000 a year, and they knew if they couldn’t make $48,000 a year for themselves and another $48,000 for me, to clear my overhead, that they couldn’t stay at the company. I can’t tell you how powerful that was in building a firm foundation for the business. Everyone knew they had to pitch in and exactly what that pitch looked like.
3. Only surround yourself with happy people
My mom always said, “People either build you or drain you, and there’s nothing in between,” and she’s right. At The Corcoran Group, I always made Friday the day that I would get rid of all my complainers. Why? Because I knew they were sucking the energy and draining my bank account psychologically. I would make sure that if someone was a complainer, and pulling down my good, happy people, they didn’t stay around very long. I considered that one of my major jobs at The Corcoran Group.
I’ve learned over time that a miserable coworker, a bad boss or a negative friend takes you down with them. They always want company. I surround myself with only positive people for one reason only – I want to be happy.
4. You have to have a system
If you’re going to do anything more than once, you’ve got to make a system to get it accomplished. My mom ran her house like a boot camp – she would’ve been great in the army. Everything had its place, and when she opened her mouth we snapped to it. She had a sock drawer in the kitchen where all the boys’ socks were: all navy blue, all one size. The girls’ sock drawer underneath it was all white, all one size. She understood how much effort was involved in sorting socks and buying different sizes for her 10 kids.
When she had to make the 10 peanut butter and jelly sandwiches every morning to send us off to school, she used a spackling knife to spread the fixings after she lined up the bread, and it took her 30 seconds to make all 10 sandwiches.
I learned that if I was going to build a big business and do something more than once, I better have a system to make it go faster. When I ran The Corcoran Group, I learned to run it like a Swiss clock where everything had its place. I remember the time it saved us the day we decided to color code our different listings by size so that all studios were pink and all one bedrooms were blue. It allowed salespeople to find the listing they needed instantly without everything getting mixed up.
5. You need a bully to beat a bully
One day my mother got tired of seeing the town bully beat up on my brother Tommy. Tommy wasn’t built like my other brothers: He was slight, he was poetic, he liked to sing and dance. One day she turned to my brothers Marty and John and said, “Just go out there and beat up that bully for your brother.” After that, it was over. He was never picked on again.
I would later use that lesson when I was being sued by the Donald himself, who didn’t want to pay me a $6 million commission that I was clearly owed. My instinct was to hire an attorney I knew. But instead, I decided to interview every bullying litigator in New York and to hire the biggest, baddest bully. Without that I never would have won.
These are the five lessons I learned from my mom and I’m telling you, I never could have built a business if I hadn’t watched her demonstrate these lessons raising her 10 kids in her two-bedroom home.
Now, I get to play “mom” and answer my Business Unusual listeners’ questions:
Q: How can I get my foot in the door while still being respectful and not overstepping my bounds?
Nick, New Jersey
Barbara: You’ve got to get rid of this notion that you’re overstepping your bounds. If you want to prove yourself or your worth to an organization or an individual, you’ve got to get comfortable boldly stepping through that door. Nobody invites you in. If I had waited for every invitation that I never got, I would never have built a business. I learned that I needed to develop a different personality than the one my parents gave me, which was to be a nice, quiet, polite child and to never cause any problems. I had to learn that nobody was going to invite me in in business unless I opened my own doors.
When you step through a door, you need a good pitch because everything in life is sales if you’re starting something new. You need to have a story about yourself. For example, you’re shaking their hand and you say, “Hi, I’m Nick Smith and the one thing I do very well is work really, really hard. I also really get along with people. I wonder if you have a position…” If someone came in my door and said that, I’d think of 15 spots where I could use them in my organization. It’s a story about you, your uniqueness and what you bring to the table.
Now, to say it with confidence takes a little work but it’s attainable for anyone. I know because I had to memorize this kind of crap and make it my own and believe it to make other people believe it. Write it down and start to believe it – you’re going to have to practice it until it’s second nature. It’s a sales pitch about yourself and there’s not a successful person out there who gets a shot to prove themselves, or get through any door, without it. It’s essential.
Q: Will my credit score be impacted if I seek a small business loan for my real estate company?
Justin, Austin, Texas
Barbara: No, a business loan should not impact your personal credit score. But before you accept a business loan, make sure it’s a real business loan and that the lender is reporting your credit history to the business credit bureau, not the personal credit bureaus. If it’s really a personal loan then it will definitely impact your personal credit score.
I know that small business lenders like my friends at OnDeck report your credit history to the appropriate business credit bureaus, not the personal credit bureaus. This helps you build business credit. That’s exactly how it should be done, so double check how it’s going to be reported.
Q: Are there times in business that you should turn down a loan because of the pressure to pay it back and if so, what are those scenarios?
Todd, Gary, Indiana
Barbara: If you have any doubt at all about your business’ ability to pay back a loan it’s stupid to borrow money. A good loan should have a specific purpose, and it only makes sense if you’re going to use the money to either improve your bottom line or increase the value of your business. In my mind, those are the only two times you should be borrowing money for a business. If the extra cash allows you to do more, getting a small business loan is always a good option. But if you’re just strapped for cash right now and trying to stay afloat, you’re out of your mind to borrow money. It’s only going to add more financial pressure to a business that’s having a hard time to begin with.