I believe everyone is born entrepreneurial. Do you believe it? Notice that I did not use the word entrepreneur, which means someone who organizes a business venture and assumes the risk for it, but rather ‘entrepreneurial’. You do not need to be an entrepreneur to exhibit entrepreneurship. Many people are employees working for an organization and yet exhibit tremendous entrepreneurship qualities in their daily work. These people are usually high flyers and you can identify them quite easily. They exhibit passion and enthusiasm in their work, usually expressing conviction and high levels of commitment in their areas of competence. In simple terms, they carry the qualities that entrepreneurs and entrepreneurial people possess. Many people say that entrepreneurs are born rather than made, but is this statement really true? Some very successful entrepreneurs are indeed born with the charisma and leadership qualities, e.g., Richard Branson of Virgin Group. In his biography, one can see that he has an influence on people ever since he was a child. But there are also some entrepreneurs who are ‘forced’ into starting businesses because of poverty stricken childhoods and became very successful in the end. So what are the common qualities which made these people different from the rest and can these qualities be learnt and applied for anyone who desires that level of success?
First of all, to attain success, we need to create value. In other words, we need to serve the needs of other people and society. And we need to do it well. Doing something well also means that we have to do something that we are good at, naturally gifted in, and develop it into a skill. For example, you make be very good with people and love communicating. You may wish to pursue a career in sales and marketing. Or you may be a genius at numbers, but may fall short in your languages and communication ability. You may want to excel as an analyst or careers which require numeric ability.
I read this book called ‘Billionaire in Training’ by Bradley J. Sugars, and I find it to be a simple, yet powerful book. The following ideas are what I have gathered from his book and some of my personal thoughts on entrepreneurship and financial success.
Usually, our first pot of gold comes from working in a company as an employee and building our capital. Acquiring knowledge and developing our skills is also an important part in this phase. This period is Phase 1. Most people will be financially contented to pursue a corporate career and climb the corporate ladder. The limitation of this phase as an employed is the income ceiling. Although some remuneration packages of high flyer employees are very rewarding, still there is a ceiling to the amount of money that we can make. Also, there are other risk factors, such as retrenchment, less freedom in time management, and others. However, one can still be very successful and wealthy working for a corporate company, and if the individual possesses entrepreneurial qualities, it will be certain that the company will pay a premium for the valued individual.
Some employees, having earned their capital and acquired sufficient knowledge and expertise, may decide to start a venture on their own. This period is Phase 2. They have the desire to be in control of their own time and their own destiny. However, there are also a different set of risks at a self employed level. They face business risk and the risk of bankruptcy if the business fails. Also, they will need to learn new skills, such as sales and marketing, negotiation and team building. This the time when they will learn to set up a working system for their sole proprietorship. Once the volume of business reaches a certain level which they cannot handle on their own, they will proceed to Phase 3.
Phase 3 is the time when the self employed has a system established and starts hiring people to handle the volume of business. He is now a manager, and his main job is to motivate his staff and recruit good team players for his business. Human resource management will then be his main skill set. He will still be overseeing the operations of the business and its day to day affairs. He is now at a phase where he is training competent people to run the business so that he can take a back seat and have a more strategic vision for his business.
Phase 4 is when the manager becomes the director of the business, leading his team towards the vision mapped out for the company. He is now the owner of the business and is no longer involved in the day to day management of the business. Rather, his team of competent staff will take over and be managed by a ‘General Manager’, whilst he is the ‘Director’ of the company. Now, having amassed his wealth through his hard work, he can start to really invest in business opportunities to expand his business and may even diversify into other industries.
Phase 5 is a very exciting time when the business owner start to pioneer new initiatives in his company, and venture into new areas in the current industry or even other industries. For example, a Chinese restaurant owner may start a chain of restaurants selling Thai food, Japanese food, etc. Or the business owner may enter a totally different industry, such as the entertainment industry. Which strategy and direction the business owner undertakes depends on many factors, such as network, opportunities, capital funding, experience, confidence in new industries, etc. They may also buy existing companies and develop them, and later on sell them for a profit. Usually, the business owner already have strong business acumen acquired over the years from building his company from scratch and can easily develop an ailing business into a profitable business, which he can sell at a premium. He is now an investor in businesses and venture capitalist.
Phase 6 is usually the most advanced stage of wealth accumulation and entrepreneurship. The investor of companies will then take his companies public and list it on the stock exchange. He will then have an investment holding company to hold the shares of these companies. By publicly listing or floating his companies, the investor is selling the shares of his companies on a national scale or even a global scale. This allows the rich entrepreneur to multiply his wealth many times over. Although the entrepreneur has relinquished most of his control over the companies to the shareholders, he could still retain a certain level of control via his investment holding company, which owns the majority of the shares of the companies. The companies that the entrepreneur has build over the years has become his investment vehicles, and he is no longer running the businesses, and he is now profiting by monitoring the companies’ share prices in the stock market.
Therefore, in my opinion, every individual has the opportunity and potential within to acquire great wealth. It all starts with having the right principles, knowing your passion, talents, and developing them into a skill to add value to others. Whether the individual is at Phase 1 or proceeds to other phases really depends on the life that the individual desires for himself, and also his risk tolerance level. Moving into other phases requires the individual to take certain calculated risks, and the financial reward is also proportionate to the level of risk he is taking. That is the reason there are always different people in the different phases, as every individual has the power to choose his desired lifestyle and career path for himself.
Aaron Graham Tay, CFP
