Building A Million Dollar Company- Three Steps

Some years ago I attended a lecture where a man who had created a successful business that sold goods all around the world gave us his three key points to success in business. These points may oppose conventional thinking, however, remember that he built a successful business using this formula. The following are his 3 key steps to success along with my thoughts:

1. The people who do the work get the reward. What a unique idea! When nearly all of us start a new business, we split up the stock and rest on our laurels! This successful business man thought it was better to observe who the players were going to be and measure the ownership based on the amount of value the individuals contributed.

While this strategy may be fine if you are self-funding your company, there are possible problems in this strategy that you'll want to be aware of. You will want to make sure you have a good relationship with those whom you are in business with. There's nothing like somebody else deciding your value. You run a large risk of not seeing eye-to-eye when it comes down to delegating equity. I like to let a business come together prior to dividing ownership up. I have had too many partners fall by the wayside prematurely or don't display the skills, contacts and drive they claimed to have.

2. Keep everything in-house. Generally, I recommend outsourcing everything you possibly can. It allows for extra flexibility and lets business owners scale quickly both forward and backward. This man's thinking was that you should make revenue as much as possible�especially in the early stages. If you outsource, you are outsourcing the profit.

I see a lot of wisdom in his ideas. He illustrated this idea well. He owned a small manufacturing plant and did everything down to screen printing 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 personal income each month.

3. Focus on accruing income. This piece of advice is the real gem. The majority of rising businesses get lost in product development and lose sight of producing money and creating profitable transactions. This man's idea was to build your merchandise, in your basement if you must, and then sell it at a high enough price that you can cover your expenses and have a surplus. efficiently ran his business out of his garage for a long time before he moved to commercial facilities.

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

At the end of my meeting, I placed the paper in my pocket. I had concluded that this guy's recipe for success, even though I might not agree with the whole philosophy, was surely 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.