We sat down with Mark Cuban at South by Southwest (SXSW), the music, film, and interactive conference in Austin, Texas. Mark is a champion and advocate for people who want to start their own businesses. So we asked: Are entrepreneurs born or made? What does it take to be a successful entrepreneur? Is there a formula? Read on for his top tips for starting a business.
Question 1: What makes someone a great entrepreneur?
Mark Cuban: We’re all entrepreneurs. We are all by nature problem solvers. We solve problems, and we find ways to help people. That’s the foundation of being an entrepreneur. The hard part is finding the thing you are good at. When you start a company, you’re going to have to compete. In order to compete, you have to be good at something. Once we find that thing, then it’s just a question of fear.
Question 2: How can people overcome that fear and take the leap to start a business?
Mark Cuban: One of the defining characteristics of an entrepreneur is you can’t be afraid to go broke. At one point, I was living with six guys in a three-bedroom apartment, sleeping on the floor. It was nasty! I had my one towel I stole from Motel 6, and it was really disgusting. But it was the best thing ever! The power of broke is you have nothing to lose. You go for it. Your back’s against the wall. You realize you’ve only got one direction. That’s the power of being an entrepreneur. Taking that first step and finding the things we’re good at are the challenges.
Question 3: How much money does a new entrepreneur need to start a business?
Mark Cuban: The best way to start a business is with as little money as possible. Or, with no money, or with money you saved up. You are selling a skill you have, and you start slowly. That’s what I’ve always done. Starting with nothing is where the big bucks are made.
When you need to raise money, the best way to do it is slowly, surely, organically.
Question 4: What’s the first step to making a business legitimate?
Mark Cuban: Let me give you a piece of advice. We live in a very litigious society these days. And one of the best things you can do is to incorporate. The best form of incorporation is what they call an LLC. It limits your liability when you do business. With an LLC, you are protecting your personal assets, like your own car, house, and savings.
Question 5: What should new business owners do when they get intimidated by aspects of business they’ve never had to deal with before?
Mark Cuban: All entrepreneurs get to the point where there is something they don’t know.
No matter what it is, you have to learn. Agility and loving to learn are great skills every entrepreneur needs. Because you’re the final decision maker. The balance of that is how fast you go. You have to slow down. Don’t rush. Be willing to learn new things. And if you need help, take the time to partner with someone who has experience.
Question 6: What’s the best way to get new customers?
Mark Cuban: If you’ve got a great product or service, the question becomes: do your customers feel the same way? If they do, they’ll be your marketers. You don’t need an MBA. Be organic. Just sell. Selling is not convincing. Selling is just opening a door and saying, “Do you love it as much as I do? Or, can I help you?” If not, you keep knocking on doors until someone says yes.
Question 7: How can business owners make sure they are including diverse perspectives?
Mark Cuban: I’m a big believer that diversity is good business. It’s not a check box. You want your workforce, particularly your salespeople, to be able to connect with your customers. Whether it’s age, gender, location, or ethnicity, it’s easier to do customer service and make a sale when there’s a commonality between people. We all have things about ourselves that make us connectors. This connection leads to genuine success.
Before we wrap up, how do you feel about the future of entrepreneurship?
Mark Cuban: America is built on entrepreneurship, period, end of sentence!
Summary: Mark Cuban’s Top Seven Tips to Start a Business
- We can all be entrepreneurs; there are no special qualifications!
- Find out what you’re really good at.
- Be willing to start with nothing and build your business slowly.
- Protect your personal assets with an LLC.
- When you get overwhelmed, ask for help. You don’t have to know everything.
- Selling isn’t convincing. If you’re passionate and persistent, doors will open.
- Diversity is good for business. Genuine connections drive success.
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