By Idina Eng, Fortune Magazine
Barbara Corcoran’s story would make perfect fodder for movies or TV: A diner waitress with moxie takes a $1,000 loan, uses it to build the first woman-owned real estate firm in New York City, and rises to the top of residential real estate in the city before selling her firm, the Corcoran Group, for $66 million in 2001. Sure enough, the woman who once owned 14 red suits — her visual trademark — eventually found her way to the small screen, with regular roles on the Today show and Shark Tank, a reality hunt for entrepreneurial talent. Her bestselling books share business advice, and today Corcoran, 64, who was once too terrified to speak in public, enjoys giving motivational talks. Her story:
I grew up in Edgewater, N.J., the second oldest of 10 kids, and even though it was a very poor town, I thought we were the Kennedys because my father wore a suit to work. He was a printing-press foreman, and my mother was a housewife.
I went to Catholic school, and it was an accomplishment for me to make straight D’s. I say this because there’s always a dumb kid in school who thinks grades have something to do with what you end up doing in life. They don’t. It’s street smarts that helped me succeed. I had 20 jobs before I graduated from St. Thomas Aquinas College in 1971, doing everything from selling hot dogs to being an orphanage housemother in my senior year.
After college, I met my boyfriend Ray Simone, a small builder in New Jersey, while waitressing at a diner. He gave me a $1,000 loan, and we started a business together called Corcoran-Simone in 1973. He got 51%, and I became a rental agent in Manhattan.
One day I started showing rentals to an engineer from Union Carbide, who said he wanted to buy a place. I had no listings, but walked him all over town, acting as though I knew what I was doing, and he ended up buying one. It was sheer happenstance. He paid around $50,000, which meant a $3,000 commission, more than 10 times a rental commission. I decided we were supposed to go into sales, and advertised for a sales agent the next day.
I had this routine. In 1973 a three-line New York Times ad cost about $180. Whenever I had more than $180 in receivables, I’d hire a new agent. If you could pay for an ad with your new agent’s name on it, the agent was happy. The minute I had enough to hire a new person, I rented double the space needed. I was getting a taste for the higher commissions, and by 1975 I was doing only sales.
We had 14 agents and our annual revenue was about $560,000 when Ray told me he was marrying another woman. As we divided the company in 1978, he said, “You’ll never succeed without me.” Those words branded my soul. I started the Corcoran Group to prove my ability to succeed.
Back then there were no female-owned real estate firms in the city. The business was worked by women and owned by men. I wore short skirts and bright colors to stand apart from the crowd. I was not welcome, but I was noticed. That first year, I had seven agents and revenues of $350,000.
It was fun building a business. We never had a Christmas party in December. We did it in February because I could get a cheap price for a fabulous place. I’d have massage guys give people 15-minute massages at their desks. It’s a high-stress job selling real estate, and anything you do for an employee above and beyond says “I love you.” When you love people, they love you back. Those at the top of the food chain got along because people forgot they were competitors. That culture made us different from everyone else.
The biggest challenge was cash flow. When things were good, I spent money quickly to invest in the business. But in 1980 I owed a lot and needed $10,000 to keep going. In a moment of desperation, I almost sold 50% of my business to a French gentleman I’d done some work for. I don’t remember his name. We shook hands, but he changed his mind, and a couple of months later, the market changed. I was able to hang on.
I never knew what the revenue was. I left that to Esther Kaplan, the first agent I hired after leaving Ray. She eventually became a 10% partner in the Corcoran Group. Esther had her finger on the overhead and was a genius at increasing our credit lines with the banks. She’d do cash projections, and if she knew that we’d have an extra $80,000 in August, she wouldn’t tell me. She was right, because if I knew it, I’d have spent it.
By 1993 we were selling real estate online, two years before our competitors. I also registered all the URLs for my competitors who had a brand so that they’d have to come to me when they wanted the name. I didn’t charge them for the URL. I just wanted them to call and ask for it so that I’d know when the competition started selling online. The little guys, who had to be creative, called first. The largest companies called last.
In 1988 I had married Bill Higgins, who was running his parents’ real estate firm at the time. After eight years of in vitro treatments, at age 46 I gave birth to our son, Tommy. That was the biggest challenge in my life and a dream come true. It also led to selling my company. Back then — before there were multiple-listing services — I kept tabs on listings weekly. One day, in 2001, I saw that we had more listings than all our competitors in every category. I had reached my goal of being the No. 1 broker in New York. I realized I wanted to be there 150% for my family in the office, and 150% for Tommy, and I couldn’t do both. So I decided to sell. I had 850 salespeople, and revenue was about $97 million.
NRT [now part of residential real estate giant Realogy] was the big buyer in town. So I hired an attorney on its board and told him I was interested in selling. He, of course, went to NRT. When he called and said he’d gotten me $20 million, I said, “Tell them I’ll take $66 million,” and hung up. Sixty-six is my lucky number. We signed the contract on Friday night before 9/11 and closed two weeks later. I convinced Henry Silverman, the chairman of NRT, that he was buying the best company poised for shooting forward in the industry.
I started reflecting and decided to write my first book [If You Don’t Have Big Breasts, Put Ribbons on Your Pigtails]. After a year, I was going crazy with no people around me. I realized I love attention. Since I’d been interviewed on TV a lot as head of the Corcoran Group, I became a political contributor for Fox TV. It wasn’t a good fit, and I went to Good Morning America as a real estate contributor. In 2007 I moved to the Today show. I think I’ll die with my boots on there.
In 2009 I got a call from Mark Burnett Productions, asking if I’d be interested in being one of the investors on Shark Tank. I signed the option agreement without even reading it. I e-mailed Mark Burnett and told him he should fly me out for a tryout. He did, and I was hired. Later he told me I was the only shark who e-mailed him about their interest in being on the show.
I’m always asked what makes a great entrepreneur, and I was curious about who’s starting businesses in America today. So we did the Corcoran Entrepreneur Report, which shows that in 2012, 67% of all people starting a business during the preceding year were immigrants. Thirty-eight percent of those starting a business today didn’t graduate from high school, which begs the question of the emphasis put on MBAs.
I think business plans are overrated. To this day I can’t read a financial report. You’re better off having a picture of what you want in your head. Half of business is planning, and half is reacting. It’s always changing. So visualize what you want and stay motivated by your dream.
Have the courage to seize opportunity. The first time I met Donald Trump, I’d produced a report called the Top 10 Condominium Survey in New York, and his building was near the bottom. He was so upset. I quickly thought up a solution. Instead of looking at what a room would sell for, the way it was done then, we could calculate price per square foot, which would put him on top. He became my biggest advocate.
Don’t let rejection stop you. I spent $71,000 to videotape all our listings. My salespeople wouldn’t show the tapes for fear a buyer would take them to another broker, and they’d lose the sale. So I posted the tapes on Corcoran.com, and we had our first online sale within a week. I’d stepped into the next big thing by trying another angle.
Protect the optimism of your firm. The minute I spotted a chronic complainer, I’d fire them. I didn’t care how much money they brought in because negativity kills optimism and belief in the future.
This story is from the June 10, 2013 issue of Fortune
Also see money.cnn.com
From Waitress to a Real Estate Queen