Business Success Secrets

Some years ago I attended a lecture where a man who had created a very successful business that was now selling goods to countries all around the world gave us his three key points to success. Although his points somewhat challenge traditional thinking, you must remember that he was successful by living this formula. Here are his 3 key steps to success along with my thoughts:

1. Those that do the work receive the reward. What a novel theory! Typically, as soon as we create a business, we divide up the stock and relax on our laurels! This man believed in discovering which individuals would bring the most value to the company and then divide up ownership based on that value.

Even though this tactic might be fine if you're self-funding your company, there could be risks in this method that you will want to be aware of. You will want to be certain you have a solid relationship with those whom you're in business with. There's nothing like somebody else determining your value. You may not be able to see eye-to-eye when it actually comes to allocating equity. I've used this principle myself to some degree. I like to let a business come together prior to dividing ownership up. I've had too many partners fall away prematurely or don't display the talents, contacts and drive they claimed to have.

2. Keep everything in-house. Usually, I suggest outsourcing as much of the manufacturing, distribution, and operations as possible. It provides added flexibility and lets business owners scale rapidly both forward and backward. The business man's thought that you ought to generate revenue on as many points as possible�particularly in the initial stages. Outsourcing means your outsourcing the profit as well.

I can see a lot of wisdom in his thinking. He exemplified the principle well. He had a small manufacturing plant and did everything down to screen printing his own T-shirts. His pay was $20,000 personal income per month.

3. Concentrate on accruing income. This point is the real pearl. Most new businesses get lost in the product development phase and lose sight of producing money and creating profitable transactions. This successful man's idea was to create the product, in your garage if you have to, and sell it at a high enough price that you can cover your expenses and have a surplus. efficiently ran his business out of his house for a long time before he began renting commercial facilities.

I've observied that the companies that I've launched this way grew risk-free to heights of profitability.

By the end of the lecture, I folded up the paper and stuffed it in my pocket. I came to the conclusion that this guy's recipe for success, although I may not agree with the whole philosophy, was definitely working for him.

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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.