Some years ago I sat in a lecture where a man who had
developed a very successful business that was now selling goods to countries
all around the world shared with us his 3 key points to success in business.
Although his points somewhat challenge traditional thinking, you must
remember that he was successful by living this formula. These are his three
key points to success along with my thoughts:
1. Those that put in the effort receive the reward. What a novel
concept! When nearly all of us start a new business, we divide up the stock
and rest on our laurels! The business man thought it was better to observe
which individuals would bring the most value to the company and then divide
up ownership based on that value.
While this strategy may work well if you are self-funding your business,
there are dangers in this method that you should be aware of. You will want
to make sure you have a good relationship with those whom you are in
business with. There is nothing like somebody else establishing your value.
You run a large risk of not seeing eye-to-eye when it comes down to
delegating equity. I've used this principle myself to some degree. I like to
let a business bring itself together before ownership is divided up. I have
had too many partners fall away prematurely or don't exhibit the skills,
contacts and drive they professed to have.
2. Keep everything in-house. Normally, I advocate outsourcing
everything you possibly can. It allows for greater flexibility and lets
business owners scale rapidly both forward and backward. The business man's
believed that you should generate revenue as much as possible�particularly
in the beginning stages. If you outsource, you are outsourcing the profit.
I see much of wisdom in his ideas. He illustrated this idea well. He had a
small manufacturing plant and even screen printed his own T-shirts. He told
our group that he was getting tired of his current company and wanted to do
something else, but that the pay was good. And good it was�at $20,000 a
month.
3. Focus on the income. This point is the true gem. A large amount of
new businesses focus on the product development phase and lose sight of
producing money and making profitable transactions. The business man's view
was to develop the product, in your basement if you have to, and sell it for
more than it cost you to build. His business successfully operated out of
his house for years before he moved to commercial facilities.
I have observied personally that the businesses that I have launched this
way developed risk-free to levels of profitable income.
By the end of the lecture, I placed the paper in my pocket. I came to the
conclusion that this guy's recipe for success, even though I may not agree
with the whole philosophy, was certainly working for him.
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About the Author: Rod Alan Richardson is dedicated to
teaching people to succeed in free enterprise through his
Business Training Course.
He also offers a free
ManagementTraining Newsletter.
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