Turbocharge Your Business #ThrowbackThursday

There are more than 8 million millionaires in the world today and more than 800 billionaires. And recent research on these people and research that goes back 50 and 100 years shows that 80%, maybe 90% of them are first generation. And they got there by starting and building a successful business. They began as entrepreneurs in a competitive economy. If you think of some of the richest people in the world today, especially in America, who do you think of? Bill Gates, started off as a dropout from college as an entrepreneur. Paul Allen, his partner, joined with Bill Gates to form Microsoft. Larry Ellison, founder of Oracle, started off alone as an individual entrepreneur. Michael Dell, worth $19 billion, 40 years old, started off as an entrepreneur. Who are the others? Warren Buffett of Hathaway Corporation, second richest man in America, started off with nothing, building an investment company. Do you know who the next five are out of the top 10? They're all descendants of Sam Walton, who started off as an entrepreneur with a little store in Bentonville, Arkansas, selling cheap goods to farm people. The point I want to make is that the greatest opportunities and possibilities for the future are the entrepreneurs. More people become financially successful as entrepreneurs than all the other sources in the world, multiplied by several times. Now the entrepreneur occupies a central position in the market economy. It is the entrepreneur who serves as a spark plug in the engine of the economy, activating and stimulating all economic activity. Everything that you see around you, every business and industry and product and service and building and airplane and computer, was all stimulated by entrepreneurial activity at some point along the line. Now, economists and historians have finally concluded that a society is prosperous to the degree to which it rewards and encourages entrepreneurial activity. In fact, completely ruined and destroyed societies become booming and prosperous when they set up a structure that encourages people to become entrepreneurs. What are some of the examples? Korea has increased its standard of living from $200 a person in 1970 to $10,000 a person, an increase of 50 times in something like 35 years by encouraging entrepreneurship. Japan, entrepreneurship, Taiwan, entrepreneurship, Singapore, Hong Kong, the greatest entrepreneurial place in Asia, and of course, the entrepreneurial power of China. But you look at Europe. Ireland has become the most booming country in Europe, growing 8 or 9% a year since they restructured their economy 10 years ago to encourage entrepreneurs. England has become more prosperous than ever before because it encourages entrepreneurship. The United States is the most entrepreneurial single country in the world, creating more new businesses and more new jobs from those businesses than any other country in the world. The entrepreneur is. Is the core. The entrepreneur is the reactor, core of the Great power machine, the power generator of the economy. Now, an entrepreneur and his activities are the critical determinants of the level of success, prosperity, growth and opportunity in any economy. The entrepreneur occupies a central position in the market economy, according to economists. Why? It's because it is entrepreneurial energy, creativity and motivation that trigger the production and sale of new products and services. The entrepreneur undertakes the risk of the enterprise, and that's the word entrepreneur. Entrepreneur means to undertake. Entrepreneur undertakes the risk of the enterprise in search of profit. Why? Because everybody wants to be better off and entrepreneurs want to be better off financially. The entrepreneur seeks opportunities to profit by satisfying as yet unsatisfied needs. So the great drive of the entrepreneur is to find needs that people have that nobody is satisfying them. There's nobody satisfying, and then to satisfy or fulfill those needs in a cost effective way. The key entrepreneurial insight, which is a special way of thinking, it's actually a special form of intelligence, is that the sale price of a product or service that he or she can bring to market will be greater than the total cost of producing it and will create a profit. That's the insight. And entrepreneurs often cannot explain how it is they have this sense, but it is what drives them to produce the product and bring it to market. Now the entrepreneur brings together the factors of production necessary to produce, offer and sell desirable products and services. This is a tremendous act of coordination. Entrepreneurs often start off without any real awareness of what's involved in starting a business. And then they realize that they have to get an office and stationary and telephones and utilities and lights and transportation and shipping and handling and raw materials and hire people. And it's overwhelming for the first part of the entrepreneur's life, until the entrepreneur, like Richard Branson, who starts business after business after business, finally reaches the point where he can do it over and over again. Richard Branson said recently that building an entrepreneurial business is pretty much the same each time, irrespective of the industry. And once you've done it once and mastered the methodology, you can do it over and over again with considerable success. Now the entrepreneur invests and risks his money and other people's money to produce a product or service that can be sold at a profit. That's the key concept. Entrepreneurs are those who are capable of bringing together money, raw materials, manufacturing facilities, skilled labor, land, buildings, everything necessary that is required to produce a product or service. And that's quite an undertaking. But the way they do it is one step at a time. And as they say, as confucius said, A journey of 1000 miles begins with a single step. You can accomplish anything if you take it one step at a time. Especially entrepreneurs are capable of arranging the marketing and the sales and the distribution of the product or service. Once they have undertaken the risk to produce it, they also have the instinct and the ability to find ways to get it to the end customer. Entrepreneurs have certain special qualities. Perhaps the most important of all is entrepreneurs are optimistic and future oriented. Optimists are very positive and confident in themselves and their abilities and they can look well into the future to see what will be needed in the future that they can produce in the present. They believe that success is possible and they're willing to risk their resources in the pursuit of profit. People often ask, well, what's the key quality of entrepreneurs? And the bottom line is they say, well, entrepreneurs are risk takers. Lots of research on this is, can entrepreneurship be taught? Well, everybody can be taught to take risks, but entrepreneurs are not really risk takers. Entrepreneurs take calculated risks because they believe that they can influence the result. Entrepreneurs, by the way, don't gamble. They don't go to casinos, they don't bet on cards because they can't control the result. As far as the entrepreneur is concerned, it's not really a risk. It's a business opportunity that requires hard work and complexity to bring together. But it's not a risk because they're in the driver's seat. And that's the difference. Of course, they're not afraid to do it. They're not afraid to try with no guarantee of success, but they don't consider it to be a risk. We also know that entrepreneurs are fast moving. They're willing to try many different strategies to achieve their profit goals. Entrepreneurs are aware that a lot of things don't work. So they're willing to try something new, try something different, and move quickly when they get negative feedback. Entrepreneurs are flexible. They're willing to change quickly when they get new information. Entrepreneurs are persistent and especially we can say this, that entrepreneurs have the courage to try and the persistence to continue. They're determined to succeed, especially because their own money and their own ego are at stake. Once they start a business, they are really concerned about making it work because they don't want to be embarrassed in front of other people. Entrepreneurs are skilled at selling against competition. By creating and exploiting what are called perceptions of difference and uniqueness in their products and services. Entrepreneurs can see how their product or service is, is actually superior to their competitors. And they're very artful at Explaining this in advertising and selling to get people to buy from them rather than buying from someone else, entrepreneurs continually seek out customer needs that competition is not satisfying. Remember the story of Ross Perot? His customers kept asking if there was some company that could process all of their information, and IBM wasn't interested. So what he did is he set up his company, Electronic Data Systems, to process the information that the computers could process. Entrepreneurs, by the way, continually seek ways to offer their products and services in such a way that they are more attractive than anything else available. The instinct of the entrepreneur is, how can I make my product or service look better or different than anything else around? Entrepreneurs are focused on selling their products against competition in dynamic markets. If you look at your great entrepreneurs today, let's pick three or four. Let's pick Sam Walton, let's pick Michael Dell, let's pick Bill Gates or Larry Ellison. These people are aggressive in selling their products or services against the most incredible competition in, in the world. It's an instinct they have, and they wouldn't have it any other way. Entrepreneurs are capable of dealing effectively with the legal and governmental requirements of business. In every country, in every state, in every city, there's government requirements that entrepreneurs have to overcome and deal with. And they become very skilled at doing this in the pursuit of profit. They're creative and they're determined to satisfy regulations in acquiring the licenses necessary to do business. Many years ago, I worked with an entrepreneur, very successful man, and he asked me to put together a business, which I put together the plan, and I went down to the city to get a license, and they said no. They didn't like the plan, they didn't like the application. So I went back to my boss and I said, they said no. And he said, they always say no the first few times. So what you do is you revise the plan, take it back, they'll say no again, and you just keep doing it until they say yes. And so I did, and he turned out to be right. Bureaucrats always say no the first few times. And entrepreneurs have the ability to just keep bouncing back until they get their plans approved. Entrepreneurs are excellent problem solvers, and they're continually seeking solutions to the obstacles that inevitably arise in the pursuit of profit. Entrepreneurs are capable of setting up the internal business systems, the processes, the procedures, and the bookkeeping necessary for operating a successful business. When they start off, by the way, these are kind of overwhelming. So the very first thing they do is they bring in bookkeepers, accountants, administrators, managers. They hire other people who have the expertise While they're concentrating on producing and selling the product, you could do the same thing. Remember, you don't have to have all the knowledge in your own head. You just have to be able to draw on that knowledge from other people. Entrepreneurs, in my experience, have a natural instinct for the financial condition of their businesses. In other words, they can look at financial statements, they can look at the business, and they have an intuitive feeling for how well they're doing. They don't have to even ask people. And sometimes when they look at a financial statement, they can tell immediately that something's wrong in the financial statement, which turns out later to be true. Entrepreneurs are intensely focused on sales, cash flow, and revenues at all times. They realize that sales, revenue and cash flow are like the heart of the business. It's beating all the time. They never take their eyes off the heart. They never take their eyes off the ball. Entrepreneurs have an instinct for what the market will buy and the prices that it will pay. Now, the economic success of nations worldwide is the result of encouraging and rewarding the entrepreneurial instinct throughout the world. Wherever the legal and commercial and banking system encourages entrepreneurs, you have hope and prosperity and opportunity and job creation. Entrepreneurs create all wealth, all jobs, all opportunities, and all prosperity in the nation today. They reckon that 70% of all new jobs are created by entrepreneurs. And here's what we 90% of the population can work at a job once it's been created, but only 10% or fewer, the entrepreneurs can actually create jobs out of nothing. So entrepreneurs are a national treasure. We need more of them. We need to encourage them more often. We need to train them better, as this program is designed to do. We need to respect them, reward them, and structure our legal system to elicit the greatest amount of entrepreneurship possible. Remember, entrepreneurs are the most important people in a market economy in terms of creating opportunity, hope, and prosperity for others. And there are never enough of them. Now, today, because of Internet technology, there's something like 36 million Internet businesses, every one of which aside and apart from bricks and mortar business, every one of these businesses is doing everything possible to attract your customers away by offering them more and better products and services, and by treating them better in every way they possibly can.