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Contrary to popular belief, when starting a new business, Shark Tank's Barbara Corcoran explains that you should avoid looking for an investor. Our viewer Michelle, who recently started a new business, sent in a question about finding an investor in order to help further grow her business.
"As far as finding an investor, [it's] a terrible idea," says Barbara. "What happens when you get an investor, you get the guy's money—almost always a male—and then he starts telling you what he envisions your business to be and how he wants it to go. They have to have an opinion, opinions come with money. So, then you start wrestling with your friendly investor and you have two gods to serve, him and where you want to go—never a good idea," she explains.
As far as what to do instead—Barbara recommends taking control yourself.
"Bootstrapping is the best way to go. And even if you can't build your business really fast, slow it down a little with the money you have, but own it yourself, use your own money and be in charge. That's what's key."
Michelle also asked Barbara about how to expand and grow her business with a small marketing budget. Barbara explains that a small marketing budget isn't a bad thing at all—in fact, social media is a free way to advertise that everyone should be taking advantage of.
"She's looking at the marketing wrong. Paid advertising is fine, but the most money wasted in the world on business is paid for advertising. The real big kahuna is social media. If you know how to do social media, you get much more than paid advertising and you don't pay a dime," Barbara explains.
"And if you don't know how to do it, you have no business being in business—[because] I'm telling you, without it, you can't succeed today. You have to be good at social media," she says.
It really all comes down to trust. "With social media, you trust. With advertising, you don't trust," Barbara says.