Daymond John − FUBU (For Us, By Us) founder and resident “shark” of ABC hit show “Shark Tank,” − knows what it’s like to grow a business from the ground up.
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Queens, NY- native John started his company FUBU in 1992, tapping into a lifestyle that he says was neglected by other clothing companies. John persevered the difficult start-up period, and the refusal of 27 banks to give him a loan, creating a clothing empire that had about $400 million in annual sales at its peak.
John admits to making mistakes along the way, but says he used those mistakes to his advantage. John, who now invests in entrepreneurs and their products on “Shark Tank,” is considered a fashion icon and sought after for his branding expertise and creative vision.
Fox Small Business spoke with John for some insider tips on how to successfully grow a business. Here’s what John suggests entrepreneurs should nail down first:
No. 1: Develop a unique product for a specific target market.
You’re not going to create anything completely brand new. But, you can create a unique product with a better form of delivery, quality, and/or target market, etc. Many people want to have something for the masses, but you should start by finding a small market and targeting that market, whether you break it down by age, demographic, price, or any other specification. Make it a market you understand.
Your product will likely grow outside of that small target market, and might even be picked up by people you wouldn’t have imagined, but start small and specific in the beginning.No. 2: Obtain proof of sales, no matter how small.
As Shark Tank’s Robert Herjavec says “sales cure all.” Forget trying to impress an investor. You have to believe in your product and have proof that your product works. You can make your own opinion about your product, but you can’t make up facts. A sale means that someone you did not know, or even someone you’re close with, invested time into your product one way or the other.
A sale does not have to be cash. A video artist who puts his or her work on YouTube and gets 50,000 people to view it and “like” it is demonstrating sales. Sales are also a great starting point of discussion. You might have had minimal sales, but that doesn’t necessarily mean you’ve failed…sales give you insight on how to recalibrate your offering. For example, maybe your price is off. Also, the dollar amount or number of sales doesn’t always reflect success. If you only did $1000 in sales, but you did it in 4 minutes, in a trunk show at the mall, then I’d say ‘there’s a business.’
No. 3: Set up distribution.
You have your product, and you have some sales to prove it’s working, now how are you going to work the sale? How is your customer going to get it?
You need to set up distribution, whether it’s via a kiosk, online, someone else’s retail shop, your basement … Whatever way it is, you can try several ways out, or a combination of distribution channels. If you know your target market, then you should know where they’re looking or most likely to buy your product. And, if you’ve made actual sales, you’ll have a sense of whether you need to expand your level of distribution.