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5 Important Business Lessons For Entrepreneurs From Mark Cuban

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5 Important Business Lessons For Entrepreneurs From Mark Cuban

Mark Cuban has a net worth of $3 billion. Most of his wealth has come from two major transactions, but the businessman has continued to enjoy success, whether with the Dallas Mavericks or Shark Tank. Cuban has transitioned from a boy who sold garbage bags to one of the most famous businessmen in the entire world.

Some pooh-pooh Cuban’s success as mere dumb luck in cashing out of the Y2K market early, but luck is when success meets opportunity. There is a lot that any entrepreneur could learn from Cuban’s success, and here are five business tricks which any entrepreneur can use to grasp just a small part of all he has accomplished.

1. Don’t persuade

For many, selling is persuasion. Do a Google search and you’ll find a whole bunch of articles that claim that with a little persuasion trick, a salesman can convince all the people in the world.

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But Cuban knows that selling and persuasion are not the same thing, as he observed that “selling is never about convincing. It is always about helping.” You don’t want to persuade someone your product is awesome. You want to show that the product will fundamentally help them in some way.

If there is any one neat persuasion trick, it is this: put yourself in the shoes of others. That is the basis of any relationship, and that is the basis of salesmanship.

2. Work hard, but smart

Cuban will be the first to tell you that hard work is the key to success. One of his first business moves as a young man was to take advantage of a local newspaper strike. Cuban and his friends drove several hours to Cleveland, bought tons of newspapers, and sold them back in his hometown of Pittsburgh for a good profit.

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But Cuban will tell you that hard work is not about putting a lot of hours in at an office. It is about getting things done. If you sit at a desk for ten hours but accomplish nothing, you might as well have stayed home. In order to work smart, you need to be organized, come to work every day with a plan, and know what needs to be accomplished.

3. Save money

If there is any one single rule which Cuban emphasizes, it is this one. Cuban may be worth a lot of money today, and he grew up in a decently well-off family, but he has known privation. He famously recounts living off ketchup and mustard sandwiches as he worked to reach his current heights.

Cuban was willing to accept this privation because he wanted to get rich, and lot of entrepreneurs will have to endure similar conditions if they wish to get anywhere in life. Get rid of the credit card, don’t eat out, and slash personal expenses as much as possible. Living cheaply isn’t a weekly or monthly thing, but something which can last years until an opportunity finally arrives.

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As Cuban observed, there is no such thing as “getting rich quick.” There is only getting rich, and that takes time and a willingness to sacrifice.

4. Never go into debt

This is similar to the above point, but Cuban believes in this so fervently that it needs to be covered twice. While there is the personal aspect of saving money by staying home, not going out to eat, and investing money where you can, there is also the business end of the deal.

As Cuban told one interviewer, “if you’re starting a business and you take out a loan, you’re a moron.”

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Most businesses can start with very little capital if you put enough effort into it. Think about Apple’s humble beginnings, or how Facebook was set up in a college dorm. If you can put in the effort and have a great idea which will appeal to consumers, then you will be able to get the capital without essentially becoming a puppet of the bank.

5. Listen to your customers’ feedback

People like to talk. And customers like to talk about the products they purchase — especially what went wrong with them. Cuban points out that the fundamental goal of any business is to satisfy their customers, because that is what will lead to growth and then to profits.

Now, there are limits to this. As Henry Ford observed, “If I asked people what they wanted, they would have said faster horses.” Innovation is supposed to be, well, innovative. An innovative businessman should push on ahead with a new product as long as they can show how it will make the customer’s life better in unexpected ways.

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But customer feedback is more important than all of the marketing research in the world. If you can ensure that the customer feels respected, then they will respect you. That will open up new opportunities and lead to good things for your business.

Featured photo credit: Danny Bollinger via flickr.com

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