Photo by Alan Cleaver.
The site Under30CEO.com posted a piece based off an article BRW magazine in Austraia wrote titled the “Young Rich List” covering tips and patterns adopted by self-made millionaires.
Since the roster of young entrepreneurs have an average networth of $65.5 million, I figured it was worth reposting.
Here are 7 business tips from the young and the rich:
1. Think big, start small.
Before you achieve that first $1 million, you have to get your first dollar.” Phillip Di Bella started a coffee business in 2002, selling coffee to cafes. He would roast his own coffee in a machine that he rented and would then pack it and deliver it himself, doing the books for the business on his girlfriends computer.
Sometimes people can have a romantic idea of what it is to be an entrepreneur, usually these ideals are shattered rather quickly when they realise that it’s not all glamour in the beginning. Having said that, it can pay off. Phillip Di Bella is now worth $47 million and is still dedicated to delivering a quality product to his loyal customers. “My promise to them, and it’s a very simple principle I’ve kept, is that I’ll do for my customers what others are not prepared to.
- Never too young.
Trent Davis started his company NetBox when he was 22. This was his third business, after his first two businesses had failed. Learning from the first two businesses, Davis went into NetBox with what he calls a “one foot on the brake approach.
Now 32, David has built NetBox into a formidable company with annual sales of $30 million and 20 staff. Having started the business at 22, he remembers the sacrifices he had to make in order to get started early. “It was two-and-a-half years before I was taking home a proper wage, which is quite a long time to be living like a university student when you’re not at university anymore
- Be willing to rough it (in the beginning).
Peter Mavridis, the founder and Managing Director of a Melbourne IT Services company, S Central is turning over $80 million every year and has a personal net worth of $62 million at the age of 37. Last year when Mavridis was listed in the Young Rich List, his personal wealth was $100m but has come back this year due to the financial climate of the last 12 months.
However, in the beginning Mavridis wasn’t talking millions. He remembers the first office he and his girlfriend leased in Melbourne, “It was one of those offices where you were scared to take the lift, so you’d take the stairs.” Mavridis now owes a lot of his success to the fact that he didn’t spend the money he didn’t have, in the early days.
- Fake it until you make it.
An important skill of any start-up or small business is to be able to look bigger than you are. Entrepreneurs are masters at giving the impression they are a large organization, when in fact they live in a studio apartment and had to catch the tram just to meet with you.
Stuart and Nicole Patterson started a building repair business when they were 24 and 23 respectively. Because they were dealing with large clients, they understood the importance of looking the part. They started the business in their rented two bedroom apartment – this was their office. Nicole would answer the phone as “the receptionist” and would direct the different calls to different people (different people being Stuart) in a number of different “departments”.
Business is about delivery and it’s also about show-business. Thanks to such a convincing performance, Stuart and Nicole have grown Pattersons Building Group into a company with revenues of $42 million per year and 70 staff.
Although the performance was a convincing one, they always understood the importance of delivery. “We delivered. We never failed a client. We had built a reliable network behind the scenes.”
- Back yourself.
While Gerry Harvey, founder of Harvey Norman, was closing down stores throughout the year to cut costs, Nigel and Tania Austin, co-founders of Cotton On, were opening three new stores a week over the 08/09 financial year. This aggressive approach to capturing market share has paid dividends for Cotton On.
This is not to say that had Gerry Harvey opened up more stores rather than shutting them down, then his wealth would not have dropped by $400 million in 12 months. But it is to say that there is always more than one approach and being greedy when others are fearful, can pay dividends in the long run.
Nigel and Tania Austin have seen their wealth jump from $125 million to $156 million, doing just that.
- Focus on the people.
Cotton On’s growth is highly aggressive, to the point where it has even drawn criticism recently by commentators who say that the growth is not sustainable. However Nigel Austin says that it’s the people in the business that have been able to ensure they have met their aggressive growth targets. “We spent a lot of money on management training to make sure our people have the right skills to drive growth.” He attributes the success of Cotton On to, the “excellent managers right across Cotton On who are real leaders and business builders.
- Have clear targets.
Given what the economy has done over the last 18 months, most entrepreneurs have not hit their financial targets. However in business as in life, it’s the goals we choose to set for ourselves and live by, that will influence our direction more than any external factor. It has been said that what lies in front of us, and behind us, is far less important than what lies within us.
As Shaun Bonett, number 5 on the list says, “I’ve found it makes me focus on managing for the longer term. It also helps to make all the challenges you are going through at a time like this feel like a worthwhile learning experience.
Overall the Young Rich held up very well over the last 12 months. The Rich List, which includes the richest 200 people in Australia (mainly over 40 years of age), saw their wealth drop by 18 per cent this year. Whereas the wealth on the Young Rich List, only dropped by 4.5 per cent – a great achievement considering we have just experienced the worst financial crisis since the 1930’s.
Each person on the Young Rich List started out with a deliberate plan, however small it may have been. Whether they started in their rented apartment or started by doing their own books on their girlfriends computer, their achievements came from deliberate decision making backed by action.
Of all the people on the Young Rich List, none ended up there by accident.