(Journey’s note: The content of this post is taken from Paul McKenna’s I Can Make You Rich. I post it here out of deep appreciation and gratitude. Hope you will enjoy and benefit from it too. Please feel free to share your ideas in the comment section!)
One of the most amazing discoveries I had when studying the high achievers for this book was that, while they all have their individual styles in business, they all share the same fundamental strategy for creating wealth. Broadly speaking, that strategy involves thinking about a product, service or business in an entrepreneurial way.
In this chapter I will show you how you can use this same wealth-creating template to create your own successful projects.
I used to find the idea of ‘entrepreneurship’ a bit daunting, but then I spoke with Peter Jones, widely acknowledged as one of Britain’s most successful young entrepreneurs. Despite his modest beginnings, his businesses have an annual turnover of £200 million. He pointed out to me that the word ‘entrepreneur’ simply means ‘someone who gets paid for adding value’. When you are willing to think of yourself as a value creator, your ‘job’ becomes quite simple:
Identify a field where you would like to add value, then identify the value you would like to add.
Over the rest of this chapter, I will outline the six steps to wealth that emerged again and again as I studied the business geniuses for this book. I will then share a case study of Richard Branson’s development of Virgin Atlantic Airlines.
Finally, you will get the chance to begin your entrepreneurial apprenticeship by choosing a product, service or business to get you started.
Do not worry if you are already in business or are determined to remain an employee – these same six steps will be of great use to you to find the hidden wealth in your current working situation, whatever it may be.
Now let’s get things started …
Step 1: Choose something you have a passion for or genuine interest in
Sol Kerzner is a billionaire hotelier with a business empire that spans the world. He told me that one of the secrets of his success was his retail billionaire genuine passion for hotels. ‘You’ve got to totally love what you do,’ he said, ‘because you are going to be spending a lot of time doing it. And when things aren’t necessarily going as well as you hoped, it is your enthusiasm for the business that will keep you going.’
Peter Jones took his fascination with tennis and computers and used them first to set up a tennis academy and then a business selling computer accessories. In his words, ‘Having a passion for what you do is very important, especially when you are going to be working all hours to try and make the business work. In addition, your passion and belief will motivate others around you.’
Of course, your passion and interest can come from what you hate as much as what you love. When Dame Anita Roddick started the Body Shop, she was as determined to provide a safe and animal-friendly alternative to the standard operating practices of the cosmetics industry as she was to create a vehicle for putting her beliefs into action about what truly mattered in the world.
Entrepreneurs are visionaries – they see things other people don’t see. –Dame Anita Roddick
Step 2: Figure out where you can add value
Once you have identified something you have a genuine interest in and passion for, you then need to look for what you can bring to that field that isn’t already there. Here are some of the questions the rich-thinking entrepreneurs ask themselves in examining the potential to add value to any business, product or service:
– Who is already making money in this area?
– What sets apart the most successful people in this field from the rest?
– What’s missing? What isn’t being done?
– What do the people who are already using this product or service really want?
– What can I offer that’s different to everyone else?
Sir Stelios Haji-Ioannou, founder of EasyJet and more than a dozen related businesses, summed up the essence of step 2 when he said: ‘People are grateful when you make a difference in their lives. That is the essence of any successful business.‘
Step 3: Vividly imagine every detail of how the business will work
One of the surprising differences between the most successful entrepreneurs I interviewed and the rest was their willingness to take the time to vividly imagine the details of every new enterprise before leaping into action.
For example, Sol Kerzner designs a hotel in his mind long before he builds them in the real world. He imagines every detail – how it will look, how each surface will feel, how the whole environment will be. Richard Branson makes pages and pages of detailed notes, describing every aspect of the business in great detail.
Peter Jones actually ‘interrogates’ the whole concept, searching for both the obvious and hidden areas of potential profits and potential obstacles to its success. If the obstacles can be overcome and he can see the business working, he gets a massive burst of motivation. He vividly imagines the business working and keeps this visualization regularly in mind. He says, ‘I am a great believer that it is always easier to achieve something that you have already done, even though I may have only achieved it in my own mind. This gives me great confidence.’
However you choose to do it, taking the time to build your business in your mind and/or on paper is an essential step in the process. Be sure to look at the downside as well as the up – the more potential obstacles you can foresee and solve in advance, the fewer real obstacles you will face and the easier it will be to overcome them.
Step 4: Evaluate the risks and decide which ones are worth taking
Retail billionaire Sir Philip Green told me how he once bought 2,000 shops without even going to see them. When I asked him how he found the confidence to do something so seemingly risky, he surprised me by saying, ‘I don’t do risk. I do what I call “educated risk”. In that instance, I didn’t need to see the shops. I had downsided the deal and knew it was worth it. Essentially, I did my homework and then bet on my own judgement.’
Dame Anita Roddick went a step further and said she had never met a single entrepreneur who took risks. ‘We all take calculated risks – in other words, we evaluate the upside and downside of any major decision and act accordingly.’
Whenever you see a successful business, someone once made a courageous decision. –Peter Drucker
This willingness to take risks after calculating the upside and downside is an essential key to their great success. The genius filmmaker George Lucas made billions from the merchandising rights to his ‘Star Wars‘ movies. When I spoke with him, he told me that he got the idea when he took a careful look at the potential upside and downside of the very first movie in the series.
‘Everyone has since thought this was a clever financial strategy,’ said Lucas, ‘but the truth is that I was concerned that the film might not work commercially. I knew it had the potential to achieve”cult status”, so I figured if I could make money on the merchandising it would help me to fund another film.‘
Here’s a quick way to calculate the risk/reward ratio of any new enterprise for yourself …
1. Think about a decision you are considering making that feels a bit risky.
2. On a scale from 1 to 10, how much good could come of taking this risk if you are successful?
3. On a scale from 1 to 10, how much of a negative impact would this risk have on your business or in your life if it’s not working?
4. If the first number is bigger than the second, the risk/reward ratio is weighted towards action; if the second number is bigger than the first, it’s probably best to find another way to proceed!
Step 5: Take Massive Action!
Another thing about the rich thinkers and successful entrepreneurs is that there is virtually no gap between their decisions and their actions. Once they decided to go ahead with a project, the first action steps were generally taken within 24 hours.
When Mark Burnett arrived in LA in 1982, he had $600 in his pocket and no return ticket. His first job was selling T-shirts on Venice beach. Today he is the most successful TV producer in the world. He told me his motto is ‘jump in‘ – take action even if you are not entirely ready. He firmly believes that a major part of his success has been his willingness to go for what he’s passionate about, even if he isn’t completely convinced he can actually pull it off.
No matter what your level of intelligence, education or capital, a willingness to take massive action instantly puts you on an equal footing with the wealthiest men and women in the world.
Step 6: Expect obstacles, learn from setbacks & keep moving towards your goals
Although only some of the rich thinkers I worked with would describe themselves as optimists, all of them are realists.
Nothing in life unfolds exactly as planned, and a road without bumps is almost certainly not headed anywhere worthwhile. Rather than take obstacles as a reason to give up, the truly successful entrepreneurs simply use each obstacle as an opportunity for creative problem-solving and creative action. If a business ultimately doesn’t work out, they pick themselves up, dust themselves off and move on.
This resilience comes from self-belief and thorough downside planning. Peter Jones shared his version of this process: If obstacles keep occurring, I stop and ask: ‘What can I learn from this obstacle? What do we need to do differently to make it work?’ I then create a new visualization of how the business needs to function and keep running this scenario in my mind until I know it will work. If another obstacle or challenge occurs further down the line, I can then return to my vision for guidance and motivation. While things may not always happen totally as I planned, I always get to my goal in the end.
The success formula in action
When I asked Sir Richard Branson how he came to start Virgin Atlantic, he gave me a perfect example of the success formula as it works in the real world. In his words: ‘I started an airline because I was flying all over the world to visit record companies – and the experience of flying on other people’s airlines was dire. I thought that I could do it better. At that time, there was no in-flight entertainment, I was lucky to have a bit of something that looked like chicken dumped into my lap by a stewardess who wasn’t smiling, the seats were uncomfortable, and flying was just a ghastly experience.’ (Step 1: Choose something you have a passion for or genuine interest in)
So he began to ask himself what was missing from the experience – what kind of an airline he would ideally like to fly on. He thought, ‘You know, I’d quite like a massage. I’d quite like not to be stuck in my seat the whole flight – to go to a bar. I’d really like to have a choice of entertainment rather than just one film.’ (Step 2: Figure out where you can add value)
From that simple beginning – from those few rich thoughts – one of the largest and most successful airlines in the world was born. But before he took a single action, he imagined how the business would work in great detail. As he said, ‘I’m a great believer in writing everything down – making long lists of things that need to be done. For the airline I wrote down pages of ideas. Basically, I love creating things. Creating a business is a bit like creating a painting. It might sound a bit big headed, but you’re trying to create a work of art.’ (Step 3: Vividly imagine every detail of how the business will work)
As soon as Branson had written his plan for Virgin Atlantic, he began looking for the risks. ‘You have to protect yourself against the downsides,’ he told me. ‘So, because I knew nothing about the airline business, I decided that if after the first year people didn’t like the experience they got on my airplanes, I wasn’t going to risk the whole of Virgin group to keep things going. I find that when protecting against the worst eventuality, it’s always worth trying to do as much as possible.’ (Step 4: Evaluate the risks and decide which ones are worth taking)
Once he’d finished writing his plan and calculated his downside, Branson took action. ‘I set about trying to see whether it was actually possible to put all those ideas I’d had into practice,’ he said. ‘I remember just picking up the phone and ringing Boeing and asking: “Do you have a second-hand 747?” That’s really where it all began.’ (Step 5: Take massive action!)
When it comes to resilience, Sir Richard Branson is a true role model. ‘As long as I’ve done everything I can to avoid something going wrong, I won’t feel badly about it if it does. If a venture doesn’t succeed, I’m good at just moving on. That’s the lesson learnt, putting it behind me, and I think that it is important to be able to do that. It is important to be positive, learn from mistakes and learn from when things go wrong. I just pick myself up and move forward.’ (Step 6: Expect obstacles, learn from setbacks & keep moving towards your goals.)
Choose Your Vehicle For Wealth
Having now been exposed to this proven formula for success, it is time for you to identify your own unique vehicle for wealth – a specific service, product or industry that you are going to add value to and use to begin bringing more money into your life than ever before. If you are already in a business you love, use these steps to clarify what you’re doing. If you’re an employee, you can either use them to begin creating a business in your spare time, or to evaluate your current job’s potential to bring you more money than you are making now.
The most difficult part of any business is getting started. It takes far more effort to make your first million than your second. –Richard Desmond
Here are the 3 things that are crucial in choosing what you will do next to begin making more money:
1. Genuine interest
Remember, passion is important in any business, but your passion does not have to be directly connected to the business you are in. A genuine interest in that business, however, is essential. One of my friends has made a fortune in three very different businesses: oil, entertainment and sewage. While he wouldn’t describe himself as passionate about all of them in the same way, he is genuinely interested in each one.
For me, I find that by marrying my passion for helping people to be happier with the kinds of things I am genuinely interested in, I am able to make money consistently in a wide variety of endeavors.
2. Ease of start-up
While there is a nearly infinite number of ways to make money, it matters far less what you could do than what you will do. And since the hardest part of any new venture is getting started, it only makes sense to choose something it will be easy to get started with.
So to get started, choose a product, service or business you could get up and running within one month. That means you need to pick something you already have sufficient understanding of, so that the learning curve is less steep, and you will build your confidence much faster.
As we’ve discussed, there are two basic ways to make money. The first is to trade your time; the second is to leverage your resources. While the old adage is ‘you’ll never get rich working for someone else’, the reality is you’ll never get really rich trading your time for money. There are only 24 hours in a day, and even if you were to spend all of them working it would still be a limited-sum game.
A scalable business is one where you can make more money without working more hours, either by replicating your efforts (i.e. franchises, employees, etc.) or by charging for the value you create as opposed to the time you put in.
The next exercise is one of the most exciting you will do over the course of this book. By the time you are done, you will have chosen and/or refined your next vehicle for wealth!
You can do this exercise on your own, but be sure to take some time to review your answers with the appropriate members of your wealth team.
CHOOSING YOUR VEHICLE
1. Make a list of everything you have ever been paid to do. Don’t censor the list- you may be surprised at what you discover. Examples:
2. Now, add anything to your list that you have thought about doing and/or always wanted to do. Examples:
- Writing books
- Hospice care worker
- Stunt pilot
- Property investor
3. Next, cross anything off the list you wouldn’t be genuinely interested in spending at least the next year of your life focused on. (This is different from ‘what you would most love to do’ – it’s just a way of ensuring that you are setting yourself up to win!)
4. Of the items remaining on your list, put a check mark next to any that it would be easy for you to get started on within the next month.
5. Finally, put a check mark next to the most easily scalable ideas – i.e. the ones you will be able to get far more out of than you could possibly put in. (If you’re not sure how you would do that, ask someone from your wealth team to help you with this one.)
For most people, it is now readily apparent which of the things on the list will make the best vehicle to get started with. If you’re still not sure, pick your top 2 or 3 ideas and do some additional research until the best choice becomes obvious to you.
Take your time with this exercise. When you find yourself getting so excited about your idea that you can’t wait to move forward, you’ll be ready to take the next step!
Frequently asked questions about ‘A Proven Formula For Success’:
Q. I’m overwhelmed! It seems to me there are a million things I could do. How do I choose just one?
One of the common reasons people have trouble choosing is they are scared of making a mistake. But this is backwards thinking. It is only by making mistakes that you can learn, and it is only by learning that you will succeed. The trick is to continually evaluate the potential downside so you are never moving forward without a plan for what you will do if it doesn’t work out.
However, if it really does feel like there are a million things you could do, celebrate. This next idea can simply be the first of many. Here are some additional questions to help you decide:
- What would you like to make money doing?
- Which of the items on your list do you feel most passionate about?
- What are the one, two or three ideas that give you the best and strongest feeling?
Q. How can I employ this formula if I want to stay as an employee?
There are two keys to making more money as an employee. The first is to continually look for ways to make yourself more valuable to your company. You can do this by generating more income and/or finding ways to save the company time and money.
The second skill is to make sure your company notices. Let them know what you’ve done, what difference it made and ask for what you want. This is what one popular business book calls ‘the art of tooting your own horn without blowing it’.
If your company is aware of what you are doing for them but remain unwilling to reward you appropriately, it may well be time to move on. You may be surprised to discover how much your worth in the marketplace has grown.
(The end of chapter 9. To be continued…)
P.S. The text has been edited slightly from the original book. This website is NOT associated to Paul McKenna at the time of posting. If you like what you see here, and wish to support his marvelous work, please purchase I Can Make You Rich at Amazon. Thank you.
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