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Are You Suited to Entrepreneurship

The 7 Traits of the (Really) Wealthy

How and why the wealthy got so rich. Here are alternative ways to learn to think about building wealth.

Arun Sangwan

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Wouldn’t you love to be wealthy? Most people readily confess that they would, and yet they do almost nothing about it.

Ask them why, and they typically state a range of reasons, including: A lack of resources, inexperience, skepticism and hostility of their surroundings, the absence of a mentor, a failed initiative in the past, the absence of a supportive societal culture, an adverse business environment and so on.

I can assure you, these are nothing but convenient excuses. To support my argument, think about this. As per Bloomberg, 73 of the 100 richest people in the world are self-made. Of these 36 had poor parents, 18 had no college degree and 8 had poor parents and no degree.

Notably Larry Ellison (Oracle), Li Ka-Shing (Cheung Kong etc.) and Leonardo del Vecchio (Luxxotica) are orphans. The parents of Amancio Ortega (Zara), John Fedricksen (Meisha etc.), Sheldon Adelson (Las Vegas Sands), Invgar Kampard (IKEA), Francois Pinault (Samsonite, Gucci etc.) were a railroad worker, a welder, a cab driver, a farmer and a lumber miller respectively.

So why is it that the illustrious entrepreneurs listed above achieved great wealth despite adverse conditions? Because they had unyielding commitment.

Someone who is ardently committed to creating wealth will instinctively show initiative rather than exhibiting inaction. They will also show a range of habits that include seeing and acting on opportunities, systematic planning, problem solving skills, commitment to work, concern for high quality, coordinating and organising skills, perseverance, persuasion skills, assertiveness, and self-confidence.

These are formally identified as the entrepreneurial competencies. The good news is that they can be learnt.

While most of us remain in awe of the wealthy, we’re not inclined to probe their journey to wealth. Instead, I have studied their early life to identify commonalities in their actions. I have not included people who attained wealth by inheritance or marriage, but through hard work.

Based on it, I present to you the seven traits of the wealthy.

1. Own a wealth-creation engine

The core belief that dominates their thinking is that wealth creation can never be outsourced or gained by partaking in someone else’s vision, but by persuading others to participate in your vision.

The wealthy do not ‘act in theaters’ owned by others. Quite the reverse, they’re the ones who:

  • Write the script (the business narrative)
  • Conceive of an output that is highly valued by customers
  • Organise resources accordingly: By devising sufficient incentives for others to act in their theater and/or persuade them to part with their resources – employees, investors, asset owners etc
  • Assign roles to people
  • Coordinate activities.

While they may invest elsewhere, the point is that it is never their primary wealth creation engine.

2. Resource-ownership is futile

The early life of most of the wealthy can be traced to humble or even disadvantaged settings. But a lack of resources never stopped them from reaching for their dreams. Their beliefs are:

  • Never restrict vision and goals to resources currently controlled, but rather set ambitious vision and goals, and then find ways to organise resources
  • Seeking resource-ownership is futile, as most resources are put to unproductive use by their owners, who will readily part with it for superior returns
  • It’s critical to devise ways of moving resources out of an area of lower and into an area of superior productivity and greater yield.

Accordingly, they develop a set of skills that are rare, unique and can’t readily be sourced from the market. These skills include:

  • Seeking opportunities where imperfect competition exists
  • Networking for accessing private information
  • Deal making to gain from temporary opportunities
  • Harnessing creativity of others
  • Harnessing innovation
  • Bringing all elements together.

3. Access to private information

They manage risk by acquiring private information. This type of information has limited distribution and is unavailable to the public. Their beliefs are:

  • The acquisition of information is an investment
  • Networking is a key to access to private information
  • Networks should be open and global, not local and closed
  • The choice of people in the network should be guided by people’s competencies and resourcefulness and not closeness

As Prof. James O Fiet states, ‘An entrepreneur is a person who optimises the tradeoff between investing too much and too little in specific, risk reducing information.’

4. Believe in imperfect competition

In perfect competition, all participants earn the same levels of profits. None can get wealthy that way. If they could, there would be no incentive for them to bear above-normal levels of risk in return for average levels of profits. So the wealthy chose to operate where:

  • Imperfect competition exists
  • They have access to private information to manage risks
  • They can benefit from a situation where others are excluded by design.

 5. Crafty deal making

The wealthy are proficient in this art. I have seen sufficient evidence that:

  • As alert discoverers, all they see are deals around them
  • They instinctively engage in deal-making all the time
  • With private information they know dynamics better than others
  • While the rest consciously discard temporary opportunities to make money, they do not.

6. Unique key for choosing and rejecting ventures

Given alternatives, the wealthy trade-off between the probability of and magnitude of loss in a peculiar manner:

  • They  undertake alternatives with a high probability of a loss as long as it is small
  • They avoid any choice where the loss could be ruinous, even if its probability was low
  • They would reject an opportunity if they could not assess its risk.

7. Consulting and/or Intellectual Property

Let me explain this through an anecdote. Recently two homemakers confronted me on which entrepreneurial opportunities they could pursue.

Step one was figuring out what they were passionate about. We drew a blank except that they ‘liked’ shopping for sarees (a dress worn by Indian women). So, what could we do with this interest? I could only think of Indian weddings. The brides buy around 30 to 50 sarees.

The affluent spend upwards of R50 000 or even multiples of R50 000. Then there are Non Resident Indians and Persons of Indian Origin across the globe. That is a huge market. With specialist skills, one can be a consultant.

Surely, you would need to master what goes into making a saree – processes, materials and their sources, weaving techniques, designs, custom designs, number of man-hours it takes, pricing etc. and then of course the import of the occasion, customs and so on.

Be it any field, mastering skills takes years to perfect. However, it can be your primary wealth creation engine. Parallel to that, you should seek avenues for sharing it with others through books, videos, lectures etc, thereby creating intellectual property, and a second (and often more successful) revenue stream.

Create a portfolio of micro businesses

You do not necessarily need to be an entrepreneur to create wealth. An alternative is to learn to think, assess and invest in micro or small enterprises, just as venture capitalists and private equity firms invest in medium or large businesses.

Professor Arun Sangwan teaches strategy and entrepreneurship for the MBA programme at the School of Business, Alliance University, Bangalore. He is a consultant to leading companies in the financial markets for the development of newer trading strategies and algorithmic trading. His last corporate assignment was as the country manager - India & SAARC for Sanrad. Previously he managed strategic alliances for companies as Hewlett-Packard and Silicon Graphics in India. He has also worked for the Tata group and HCL. Connect with him on LinkedIn or email to arunsanguine@gmail.com for more information.

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3 Comments

3 Comments

  1. John K

    May 28, 2014 at 11:58

    Briefly put the way to wealth is not a highway but a narrow street that someone takes the trouble to find and reaps the benefits.If it was visible you would have a highway built there too which makes it perfect competition and its the imperfection or assymetry in information that gets in the additional margins. Even in todays day and age entrepreneurs are finding that unknown street and it is really a testimony to the spirit of entrepreneurship which is basically restlessness and changing the status quo. Wonderfully captured by the author of this article.

  2. shridhar hiremath

    Aug 31, 2014 at 17:11

    Seems simple, but hidden traits!! The Entrepreneurs need to indentify that white space in the market and make a strategic mark by pursuing everthing that comes your way towards the goal and vision. Very impressive observations Sir @Arun sangwan.

  3. Leaxan Freitas

    Sep 10, 2014 at 15:51

    “all they see are deals around them”, this is very true, what may look like a barren field to the common man may be seen as something as simple as a potential parking lot or a place to set up shop by an entrepreneur.

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Are You Suited to Entrepreneurship

12 Entrepreneurial Traits That Will Tempt You To Quit Your Job Immediately

Unhappy in your job? It’s possible you’re an entrepreneur.

John Rampton

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You’re sitting at your desk one day, and a light bulb goes off for a business idea. After a couple of days spent contemplating the idea, you decide it’s not worth pursuing.

While the idea might not have been as great as you initially thought, the reality might be that you’re uncertain if  you are cut out to be your own boss. After all, starting and running a business isn’t for the faint of heart.

You may actually have what it takes to be an entrepreneur but you have been focused on providing for your family or just need a little spark to ignite that fire. If you’ve been on the fence about entrepreneurship, see if you have the following traits.

1. Your “business mind” began spinning at a young age

Think back to when you were young. Were you the type of kid who was making money with a side gig? That’s one of the most common denominators linking successful entrepreneurs.

For example, Daymond John created customised pencils for girls in his first-grade class. Mark Cuban sold trash bags in his neighbourhood as a 12-year-old. Richard Branson bred and sold parakeets. Juliette Brindak designed a website at age 16 that went on to be worth $30 million.

Simply put, the gears of an entrepreneur’s “business mind” start spinning at an early age. If you’ve always been looking for ways to make money, you’ve probably been an entrepreneur your whole life – you just didn’t realise it.

2. You’re a self-starter

Entrepreneurs are known for carving their own paths. They don’t follow others, wait for permission or let distractions get in their way.

Reflect on your life. Did you start an organisation in college? Have you volunteered for a local charity? When there’s a project to complete at work, have you been the person to take the reins and rally the troops?

These are signs that you have a get-it-done personality, which is essential to making your vision a reality. This is a very good sign you’re an entrepreneur.

Related: 10 Things You Must Do Before Quitting Your Job To Start Your Company

3. You think like MacGyver

Back in the ’80s, there was an amazing TV show called “MacGyver – there’s a reimagined version currently on-air. The series was about Angus “Mac” MacGyver, who was a troubleshooter with unconventional problem-solving skills. One time, he made a hot-air balloon out of a soccer ball, kerosene, newspapers and cotton.

Entrepreneurs are also troubleshooters who develop innovative and out-of-the-box ideas to solve problems. They are resourceful and think quickly on their feet.

4. Losing gets you fired up

No one likes to lose. But there’s a big difference between entrepreneurs and everyone else – they’re motivated by setbacks.

They don’t make excuses, complain or give up. Instead, they use setbacks as motivation. Take Gary Vaynerchuk, for example. He loves losing. It sounds a bit out there. But, as he explains, “I’m obsessed with losing.” The reason? “I love losing, because I know what you’re thinking about my loss, and I can’t wait to stick it in your face when I come back.”

5. You’re driven by passion

Passion: It drives us to take risks and pursue our dreams. For entrepreneurs, this also means focusing only on the goals they’re passionate about. It encourages them to see those goals through – regardless of distractions or hurdles.

If you’re the type of person who works out when you’re in pain or completes a project at your current gig before the deadline, you’re driven by passion.

Related: 9 Reasons To Quit Your Job As Soon As You Can

6. You are easily bored

Do you find yourself easily bored? Some people might think that’s a problem. There’s nothing wrong with being bored with activities that don’t use your abilities or aren’t challenging.

That’s why throughout school, you couldn’t stand most of the classes you attended. They either weren’t difficult enough or you just couldn’t sustain any interest – you knew you wouldn’t be using the information presented to you.

7. You’re able to delay gratification

Few successful entrepreneurs experienced overnight success. The reality is that it may take years, if not decades, for entrepreneurs to develop and launch a business. Even after they start their business, it takes a decent amount of time to start turning a profit. It takes many around three years, but this can vary.

Because of this, entrepreneurs must be patient and willing to delay gratification. At the same time, they can see the light at the end of the tunnel.

8. At work, you’re a super connector; at home, you’re a loner

When you’re at work, are you a rock star? This means you excel at your job, and people flock to you. When you get home, are you more of a loner?

That’s not exactly shocking. Entrepreneurs place a huge emphasis on their work. Even bigger on having productive habits at work. It’s their priority – even at the expense of close personal relationships.

Richard Branson has said that “Business is all about personal contact. No matter how heavy your workload is, do not allow yourself to work in your cubicle or office all day, every day – for your own well-being and the health of your business, you need to get out and about, meeting people and developing relationships.”

Related: Why You Shouldn’t Quit Your Job To Start A Business

9. You can spot trends

When entrepreneurs are out and about, they’re taking stock of what’s going on around them. It’s not some strange safety precaution. It’s because they’re looking for trends and analysing what customers are demanding.

Take Beanie Babies, for example. The craze started when a community in the Chicago suburbs started trading the stuffed animals. After it went national, Peggy Gallagher noticed it hadn’t reached Germany. Gallagher contacted a distributor in Germany and placed an order for $2 000. She brought the box of hard-to-find stuffed animals back to the States and made an impressive $300 000.

10. You go big or go home

“We’re often told not to ‘bet the house’ on anything,” writes Lauren Elmore, president of Firmatek. “It’s generally good advice. But the best business advice I’ve received is actually the opposite: Bet the house on it.”

“Betting the house is the best piece of advice I’ve received because it’s not a singular thing to do,” explains Elmore. “It’s a way of life and a mentality that promotes taking risks and giving everything you have to make it work.”

Of course, just because you go all-in doesn’t mean you do so carelessly. Entrepreneurs minimise risks by surrounding themselves with the right people, being resilient and addressing their fears to let them go.

11. You’ve had a history of losing jobs

Have you bounced from job to job because you got fired? Don’t be embarrassed. You’re just too creative, driven and self-motivated to work for someone else.

I’d even say you may be a bit selfish – why should someone else reap the benefits of your hard work and talent?

Related: 20 Signs That You Should Quit Your Job (Infographic)

12. You’re never satisfied

In school, did you best your classmates in academics or sports, but still feel disappointed? Do you have more sales than your colleagues, but it’s still not enough?

You’re constantly striving for more because you realise victories are short-lived. That’s why you see a lot of entrepreneurs start a thriving business and move on to another – they want to tackle new challenges and setbacks.

You may not have made the entrepreneurial leap yet, but if these 12 traits sound familiar, it’s more likely a matter of “when,” not “if.”

This article was originally posted here on Entrepreneur.com.

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Are You Suited to Entrepreneurship

Want To Get That Side Hustle You’ve Been Dreaming Of Off The Ground This Year?

Stop dreaming. Carve out 30 minutes a night after the kids are in bed, and start putting together something tangible.

Syed Balkhi

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Want to make extra income? Who doesn’t? That’s why so many people in recent years have been taking their talents and skills and turning them into a side hustle. In fact, according to a recent survey from Bankrate, nearly four in 10 Americans polled (37 percent) said they have a side hustle.

Unfortunately, though, a lot of people get stuck in the “dreaming” stage. They sit around brainstorming ideas and dreaming of the day they have a successful side hustle that brings them joy and money but never actually get started. Well, scratch that: This is the year to turn it all around.

And to do that, and get one step (or multiple steps) closer to turning your side gig idea into an actual money-maker, check out these five tips for how to get your side hustle off the ground this year.

1. Change your mindset

A lot of people never get their side hustle off the ground because they have the wrong mindset. I know it seems simple, but believing in yourself and thinking of yourself as a business owner and not just a hobbyist will make all of the difference when it comes to starting a successful side hustle.

Even if you’re nowhere near to being a successful business owner yet, act like one. In fact, the “fake it until you make it” strategy actually works. According to a study in Psychology Today, people gain influence by acting dominant and confident. This strategy has the ability to convince people you’re serious about your side hustle and can win you customers, too.

Related: 20 South African Side-Hustles You Can Start This Weekend

2. Create an agenda

You can’t expect your side hustle to take flight on its own; you’ve got to put in the hours to get it off the ground. I know it’s hard to feel motivated to do that when you’ve already got a full-time job and a ton of other responsibilities, but you’ve got to set time aside.

Luckily though, you don’t have to fear burning out to get it done: Chris Guillebeau, founder of the Side Hustle School and author of Side Hustle: From Idea to Income in 27 Days, says that you can develop a successful side hustle by carving out just 20 to 30 minutes of your day. If you’re a parent, you might choose 30 minutes each evening after the kids are in bed; or you could even use your lunch break at work.

Whatever time you choose, put it in your calendar, set an alarm for it, stick to it and don’t let anyone drag you away from it.

3. Join a community

Sometimes we all need a little bit of inspiration to give us the push we need and some good solid advice to help us improve. That’s why you should join an online community for side hustlers. Joining with like-minded people can help you build a support system of buddies who have been where you are now and can provide a wealth of information to get your side hustle going.

There are tons of such groups onlines. Simply search for them on Facebook and LinkedIn and you’ll discover numerous groups for every niche. Ask questions, bounce ideas off other members, learn from others’ mistakes and get inspired by stories of success. All of this community interaction will push you in the right direction.

4. Build a tangible brand

Branding is the personality that identifies a company to its customers. Even if your business is only part-time, you still need to build a brand in order to attract customers and present yourself as a professional business. This means creating a logo, coming up with a tagline and developing a theme for your website, including a colour scheme and personality. All of this will work together to show your target audience who you are as a business.

If you’re thinking that all of that sounds expensive, don’t worry. For side hustlers who are strapped for cash, there are a number of ways to create a stunning brand while still saving your pennies. If you set up your website with WordPress, for example, you’ll find many free and affordable website themes to help you build a brand with just the click of a button. You can also use a free tool like Canva to create a gorgeous logo, business cards, flyers and more for your side hustle venture.

Related: 50 Jobs, Gigs And Side Hustles You Can Do From Home

5. Start marketing your side hustle

The final step to getting your side hustle off the ground is to start putting yourself out there. So, whatever you do, don’t keep your side hustle a secret! Start telling all your friends, family and neighbours about your side hustle. One of them could become your first client or customer or could recommend you to someone he or she knows.

Next, get online and start marketing your side hustle on social media. Social media platforms like Pinterest and Instagram are particularly great for marketing product-based side hustles. Other free ways to market your side hustle online include joining forums like Quora, blogging and building an email list and cold-emailing potential clients to offer your services.

Over to you

Don’t sit around again this year wondering if your side hustle has what it takes to make money. Get out there and make it happen. With the new tips you’ve learned, this year will finally be the year you hit the ground running.

This article was originally posted here on Entrepreneur.com.

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Are You Suited to Entrepreneurship

7 Skills Every Entrepreneur Should Adopt Today

There are certain skills that any entrepreneur can adopt to help build a business and shape their future.

Nicholas Bell

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The road taken by the entrepreneur used to be the one least travelled. The one where only the bold dared to tread and few understood the risk or benefitted from the reward. Today, the road may be one travelled by many but it still comes with challenges and obstacles that can trip up the unwary. The best way to thrive, is to learn from other entrepreneurs, using their learnings and mistakes to sidestep the challenges and embrace the opportunities.

Here are seven skills that any entrepreneur can apply to their journey today:

1. A vision

Know exactly what you want. Have a clear idea of your end goal. Write it down, verbalise it, embrace it. This is how you know exactly where your steps will take you. Your vision is what defines the strategic goals of your company and what helps you create a business plan that will get you where you want to go.

2. Ask questions

Question yourself, your plans, your strategy, your business plans and your decisions. This is a critical skill that will ensure that you are constantly driving yourself to be better tomorrow than you are today. By challenging yourself at every turn you will refine your vision and ensure you are always on the right path.

3. Passion and energy

Nobody else is going to be passionate about your business. Nobody else has the energy to take it where it has to go. It is entirely up to you. This may sound extreme, but without these two key qualities you will battle to take your business through the complexities that lie ahead and onwards into long-term success.

4. A work ethic

Like passion and energy, a work ethic is critical. This is your business and your vision so you need to put in the hours. And there are a lot of hours.

If you’re not prepared for the weekends, late nights and unexpected holiday disruptions, then you may not be ready for the demands of being an entrepreneur.

5. Create opportunity

While you may be the vision, the passion and the workhorse of your business, it is important to remember that your company can only go so far with only one person behind the wheel. Learn how to build a team and focus your energy on building something bigger than yourself. Your drive should not be just about building a successful business, but creating opportunities for others.

6. Communication

Throughout your journey you will need to share your vision, ideals and business plans with your employees and your executives. They have to buy into what you are planning, to be fully engaged with the work that they do. This means you have to learn how to communicate clearly and create a transparent culture so people feel part of something and committed to what it represents.

7. Sales

Ultimately, you want your business to grow and this means mastering the art of selling. Regardless of your business proposition, it is likely you need customers to buy into your product or service. So, learn how to sell. A large part of this magic formula is made up of the passion, energy and work ethic you’ve already mastered, the rest is all about relationships, communication and hooking the clients.

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