How Billionaires Become Billionaires

How to Buy a Business: Broker Versus Intermediary

From searching through the listings of businesses for sale, I have noticed that there are both brokers and intermediaries. What is the difference between the two and who should a first time buyer talk to?

This is a great question and one that almost everyone wonders about. The best way to answer this is to explain that brokers and intermediaries sell different sizes of business. The broker typically sells the small or what is commonly known as the "Main Street" business. This include restaurants, coffee shops, retail shops, gas stations, bowling alleys, etc. In contrast the intermediary will typically represent larger companies with ten million dollars in sales or more.

They also work differently. A business broker will usually work like a real estate broker. That is to say, they will try to acquire as many listings as possible in the hopes that some buyer will come along for each one eventually.Business brokers often belong to a franchise operation and have store front offices you can walk into and inquire about the opportunities they have for sale.

In contrast, you see intermediaries by appointment only. They are very selective about the clients they take on because finding buyers for larger companies takes a lot of time and effort. As a result, intermediaries will limit themselves to about half a dozen or so clients at a time that they can effectively market.

10 People Who Got Rich During the Depression

Today CNN has ten short profiles of people who did well during the depression.

10 People Who Got Rich During the Depression

Dan Pink on How to Motivate People the Right Way

Dan Pink on the Surprising Science of Motivation

This is an eye-opener on why traditional motivational tactics often don't work and what you can replace them with.

The Billion Dollar Idea!

What's the Billion Dollar Idea?

This blog receives a small but steady stream of traffic from people searching for a "billion dollar idea" or in fewer cases the "million dollar idea."

This is a rather strange topic to conduct a search on. Are these people really thinking that someone with a viable idea for a making a billion dollars will post it on the Net for everyone to see?

Or are they looking for historical examples of ideas that made a billion for their creators?

Either way, it's a rather pointless approach.

Here's a far more interesting thing to consider. Did you know that Napoleon Hill, author of Think and Grow Rich, almost ended up in the poor house when he got old? The only thing that saved him was a job offer as a trainer with W. Clement Stone's insurance company.

What was the difference between the two men?

Well, one was all about ideas. The other was about something entirely different.

To find out what that was, you'll need to sign for the free newsletter.

 

Alain de Botton: A kinder, gentler philosophy of success

Alain de Botton examines our ideas of success and failure -- and questions the assumptions underlying these two judgments. Is success always earned? Is failure? He makes an eloquent, witty case to move beyond snobbery to find true pleasure in our work.

How to Buy a Business: The Coming Boom in M&A

I've already made mention of this emerging trend in my post on the next Gold Rush. While this NYT piece focuses on middle-market M&A, rest assured that there's also going to be activity at the lower end of the markets--which is where we focus.

Mr. Roberts predicts that the resurgence of deal-making will begin within the next six months to a year as the economy improves and the middle-market mergers-and-acquisitions cycle pulls out of its current contraction.

This time, though, in his view, the recovery will get extra thrust from the convergence of four other trends: burnout in the ranks of baby-boomer business owners, rapid technology advances that are driving market consolidation, long-term growth in the appetite of foreigners for United States companies and a buildup of cash at the nation’s 4,000 to 8,000 private equity groups.

“There is tremendous, pent-up demand on both the buy and sell side,” he said. “These middle-market firms account for two-thirds of gross national product. And they aren’t going anywhere.”

 ...

Mr. Roberts, the investment banker, says baby boomer burnout will be a driving force in the M.& A. boom that he sees on the horizon. Of the 1.2 million middle-market businesses, more than 800,000, with a total market value of $3 trillion, are owned by people born in the years 1946 through 1964, he calculates. He estimates they will sell or leave to heirs 560,000 companies with a value of $2.5 trillion, and shut down or otherwise dispose of the others.

The process has already begun, as some of the owners retire, become sick or disabled or find a sudden need for cash. “Those entrepreneurial fires can die more quickly than you’d think,” Mr. Roberts said. “One day you’re suddenly tired.” (source)

The Next Gold Rush.

Billionaire Profiles: Top Man How Philip Green Built His High Street Empire

Top Man How Philip Green Built His High Street Empire

Philip Green, owner of, amongst much else, British Home Stores, reached billionaire status faster than anyone else in British history. Today he is worth GBP 3.6 billion and is reckoned to be the country's fourth richest citizen.

This is the first biography of a man whose aggressive business tactics and brash lifestyle have transformed the staid image of British retailing, and who is likely to remain in the headlines for as long as his ultimate prize, Marks and Spencer, continues to elude his grasp. A middle-class Jewish boy from North London who left school at fifteen, Green started and failed with four businesses before he made it with his fifth venture, Jean Jeannie, which he sold to Lee Cooper for an enormous profit that set him on the road to fame and fortune.

But there were pitfalls on the way; in particular, his involvement with Amber Day, a public company, left him with an abiding dislike for both the City establishment and outside investors. Ever since, he has relied upon a close group of like-minded entrepreneurs, including Tom Hunter the sports shoe millionaire and the Barclay twins, to help fund his buccaneering forays into Britain's High Streets. The authors describe Green's takeover and highly profitable break up of the Sears empire created by one of his business heroes, Charles Clore, and his first audacious attempt to seize control of Marks and Spencer at the end of 1999. Frustrated, in part by what were widely perceived as unfair tactics on the part of M&S, Green then turned his attention to the ailing BHS, for which he paid a mere GBP 200 million and then transformed its fortunes to such an extent that, in 2004, he was able to transfer dividends totalling GBP 400 million to his Monaco tax haven.

His appetite unsated, Green then turned his attention to the Arcadia Group, which included brands such as Miss Selfridge, Top Shop and Dorothy Perkins before making another bid for M&S in 2004. Again he was foiled, partly because of what he saw as treachery on the part of his former protege Stuart Rose, the man who was appointed by M&S to see off Green's bid. But there seems little doubt that, given the opportunity, he will be back and that this time the personal grudge between the two men will give the contest an added bitterness.

Get more info on Top Man How Philip Green Built His High Street Empire.

Becoming a Billionaire: Alexander Lebedev

Becoming a Billionaire

Russian billionaire Alexander Lebedev talks about how he became a billionaire. He's a Russian oligarch and the owner of the London Evening Standard. Click here for video.

If you are seriously interested in how people become billionaires, take the first ever course on how billionaires become billionaires.

The Truck Driver Who Reinvented Shipping: Malcolm P. McLean

Malcolm P. McLean is the man who invented the cargo container. Here's a short and very readable account of how he came up with the idea that would revolutionize transport.

Malcolm P. McLean, a truck driver, fundamentally transformed the centuries-old shipping industry, an industry that had long decided that it had no incentive to change. By developing the first safe, reliable, and cost effective approach to transporting containerized cargo, McLean made a contribution to maritime trade so phenomenal that he has been compared to the father of the steam engine, Robert Fulton.

(source)

How to Buy Up Companies: Tom Murphy of Capital Cities/ABC Shares His Story

Tom Murphy has bought a lot of companies over the years. He began from humble roots and shares his story with Charlie Rose. He talks about the Disney/ABC merger, the highly competitive worlds of entertainment and television, his business strategies, and his long career as an executive and entrepreneur.