25 Small Business and Entrepreneur Quotes on Business Growth, Marketing and Motivation
Entrepreneur SmartTips Guide Business Growth Rapid Steady Growth
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Transcript of Entrepreneur SmartTips Guide Business Growth Rapid Steady Growth
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TheHow-to
Handbook
smartp
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2/10
d e f i n i n g t h e b u s i n e s s m o
Take your start-up to the next level with thiscollection o business growth articles selected
rom Entrepreneurmagazine. In this booklet,expert writers will guide you through the disciplinesand principles necessary to build a solid platorm or
protable and sustainable growth.
A Platr r Rapid, Steady GrtcoNsIstENt ANd AggrEssIvE growth cAN BE rEAlIsEdthrough thE dEvElopMENt of BusINEss dIscIplINEsANd succEss prINcIplEs.
Businss Advi Tls:
1Habits for success & ProsPerity
World-renowned expert Brian Tracy onwhich habits to develop to take your business
to the top. Pg 2
2Define roles & structureBuild your business as i it were a ranchiseand dene roles upront to build a solid
oundation. Pg 6
3get your Plan in actionHow to use ROI (return on investment) tond the most avourable strategy to grow your
business. Pg 8
4Dominate your marketFind out what it takes to get ahead o the
competition. Pg 10
5get more business from
fewer clientsRather than planting new accounts, cultivatethe relationships with the customers you
already have. Pg 12
6avoiD Diseconomies of scaleFor years business owners have been strito grow their businesses bigger and bigger to
achieve economies o scale. Pg 14
7aDaPt to surviveWealth expert Robert Kiyosaki on buildingyour company to be tough and tenacious, or
lithe and limber. Pg 16
i
PUBLISHING CREDITS
plh Andrew Honey maa Nicole Lombard cpy Lesley Lambert a c NikkiEntrepreneur South Africa is published by Smart Business Solutions (Pty) Ltd. A KreditInform Group Company
beginners guide to
The How-to Guide
for Starting & Improving a Business.eneenema..za
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The absence o any one o thesekey habits can be costly, even
atal, to your company. Whenyou become competent and capablein each o these areas, you will be
able to accomplish extraordinaryresults ar aster and ar easier thanyour competitors.
1Plan thrughly. The rst re-quirement or business successis the habit o planning. The betteryou plan your activities in advance,the aster and easier it will be or
you to carry out your plans and getthe results you desire once youstart to work.
There is a Six P acronymthat says, proper prior planningprevents poor perormance. Very
oten, the rst 20% o the time thatyou spend developing completeplans will save you 80% o the time
later in achieving the business goals
you have set.You need to ask yoursel very
specic questions and be sure tohave crystal-clear answers (seebox, page 5). Once you have asked
and answered these questions,
the next stage o planning is toset specic targets or sales and
protability. You must determine theexact amount o money, adver-tising, marketing, distribution,
acilities, and administration andservice people you will need in orderto achieve your goals.
2Get rganised bere yuget started. Once you havedeveloped a complete plan or your
business, you must then developthe habit o organising the people
wANt to tAkE your BusINEss to thE top? dEvElop thEsE hABIts ANd ENjoy
A sMooth jourNEy. By BrIAN trAcy
Habits r Success & Prsperity01
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and resources you need beoreyou begin. In organising, you bringtogether all the resources you have
determined youll need in the plan-ning process. In the military, thereis a saying: Amateurs talk strategy,
but proessionals talk logistics.Its essential that you determine
every ingredient youll need beore
you begin business operations andbring them together so they areready to go when you open your
doors or begin your project. The ail-ure to provide even one importantingredient in advance can lead to
the ailure o the entire enterprise.
3Find the right peple. The thirdhabit you must develop is thehabit o hiring the right people tohelp you achieve your goals. Fully
95% o your success as an entrepre-neur or executive will be determinedby the quality o the people you
recruit to work with you or to workon your team. The act is, the best
companies have the best peop
The second-best companies hathe second-best people. The th
best companies have the averaor mediocre people, and they atheir way out o business.
4Delegate isely. The ourthabit you need to develop obusiness success is proper deletion. You must develop the abilitdelegate the right task to the rig
person in the right way. The inabto delegate eectively can be thcause o ailure or underperorm
o the individual and can even babout ailure o the business.
When people start in busines
they usually do everything themselves. As they grow and expanjob becomes too large or one p
so they hire someone to do partHowever, i they are not careul,try to retain control o the task a
never ully hand over authority responsibility to the other perso
Whether youre an executive o
entrepreneur, you need to identi
two or three things that you do thcontribute the most value to you
pany and then delegate the rest. to think in terms o getting thingdone through others rather than
trying to do them yoursel. Its the
Q tp: Th thuhly yu plan ah
sta f yu businss ativitis
bf yu bin, th at th
pbability that yu ill sud
hn yu n patins.
you need
to identify
the two
or three
things that
you do that
contribute
the most
value
to your
company
and then
delegate
the rest.
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o selecting and dening specicgoals, measures and activities thatare then used as benchmarks or
perormance. In his book FromGood to Great, author Jim Collinsreers to the importance o selecting
the economic denominator or acompany, and or individual goalsand objectives within that company.
Whichever number you choose, itmust be clear to everyone, and itmust be monitored continually to
make sure everyone is on track.
7
Keep peple inred. The
seventh habit or businesspeo-
ple is the habit o reporting resultsregularly and accurately. People
around you need to know whats go-ing on. Your bankers need to knowyour nancial results. Your sta
needs to know the status and thesituation o your company. Your keypeople, at all levels, need to know
what results are being achieved.In a study on workplace motiva-
tion, several thousand employees
said the most important actor lead-
ing to job satisaction was being inthe know. People in an organisa-
tion have a deep need to know andunderstand what is going on aroundthem in relation to their work.
The more thoroughly and acc
rately you report to people the d
and situation o your business, thappier they will be and the bett
the results they will get.
way you can leverage and multiplyyour special skills and abilities.
5Inspect hat yu expect.The th requirement or busi-
ness success is or you to develop
the habit o proper supervision. Youmust set up a system to monitor thetask and make sure its being done
as agreed upon. The rule is: inspectwhat you expect.
Once you have delegated a task
to the right person in the rightway, its essential that you monitorthe perormance o the task and
make sure its done on schedule
and to the required level o quality.
Remember that delegation is not ab-
dication. You are still responsible orthe ultimate results o the delegated
tasks. You must stay on top o them.When you have delegated a task,set up a system o reporting so thatyoure always inormed about the
status o the work. Be sure the otherperson knows what is to be done,and when, and to what standard.
Your job is then to make sure heor she has the time and resourcesnecessary to get the job done
satisactorily. The more importantthe job, the more oten you shouldcheck on the progress.
6measure hat gets dne. Thesixth practice o successulentrepreneurs and executives is thehabit o measuring perormance.
You must set specic, measurablestandards and scorecards or theresults you require. You have to set
specic timelines and deadlinesto make sure you make yournumbers on schedule. Everyone
who is expected to carry out a task
must know with complete claritythe targets he or she is aiming at,
how successul perormance will bemeasured, and when the expectedresults are due.
Dont underestimate the importance
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This article is excerpted from Mii DHis from Entrepreneur Press EntreprMedia, Inc. All rights reserved.
b b P
DEvELoP THE HABIT oF
ASKING AND ANSwERING THEFoLLowING qUESTIoNS:
what xatly is y pdut
wh xatly is y ust
why ds y ust buy
what ds y ust
b f valu?
what is it that aks y p
svi supi t that
ptits?
why is it that y psptiv
ust ds nt buy?
why ds y psptiv
buy f y ptit?
what valu ds h/sh p
buyin f y ptit
H an I ffst that pp
t y ptits ust
buy f ?
what n thin ust y u
nvind f t buy f
than f sn ls?
everyone
who isexpected to
carry out
a task must
know with
complete
clarity the
targets
he or she
is aiming
at, how
successfulperfor-
mance
will be
measured,
and when
the expected
results
are due.
more
infoi
inormation
on demand
Over 800 pages
of practical
business
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try keep up with the everydaydemands o the business.
This is a common situation orbusiness owners. Early in theliecycle o the business entre-
preneurs land up doing every-thing themselves, rom productdevelopment, marketing, sales
and accounting, to delivery. As thebusiness grows, so these demandsincrease. With the increasing
demands, the entrepreneurs do nothave the time to put in processesand systems to deliver on the
companys oering. They get drawn
more and more into the detail o ev-ery aspect o the business and the
business becomes more and moredependent on the owner to keepdelivering. This turns into a vicious
cycle that restrains the growth othe business and can lead to burn-out on the part o the entrepreneur,
or to poor quality products andcustomer service.
what can entrepreneurs do
to structure their business
so that it can grow without
consuming them and becoming
totally reliant on them?
One o the answers to this question
is to approach the building o a new
business with a ranchise min
as described by Michael Gerber
excellent book The E-Myth RevisIn other words, as you build you
business, set it up as though yogoing to ranchise it. A ranchisa recipe or a business that can
replicated many times over. Youhave no intention o ever ranchbut i you adopt the ranchise
mindset you are orced to denvarious roles in the organisationup the systems and processes
product and service delivery anthe goals and measures in plac
ensure success. This establishethe oundations or eectivebusiness growth.
It is not easy to bring this so
o rigour and discipline to a smgrowing business. It is much mun to just create, sell and deliv
But i you dont dene who doewhat and how things should bedone you will eventually nd
yoursel doing absolutelyeverything and orsaking every
other aspect o your lie to keepthe business growing.
what canentrepre-
neurs do to
structure
their
business
so that it
can grow
without
consuming
them and
becoming
totally
reliant on
them?
Defne Rles & Structures
Recently I called three o myriends to nd out i theywanted to join me or a Sat-
urday morning mountain bike rideollowed by a leisurely breakastand catch-up session. All three
are business owners and all threeturned me down. One had to spend
time compiling and sending outinvoices that were three monthsoverdue, the other had to work allweekend to push out a tender that
was due on Monday morning andthe nal person had to visit a client
who had called in that aternoon
with a major problem that neededto be sorted out by noon the nextday. As I pondered the situation
I realised that my riends werereally working hard and becomingoverwhelmed by the challenge o
managing a small but growing
business. They were eeling thestrain o being responsible or too
many acets o the business; theyelt like they were being pulled in20 dierent directions and they
were working crazy hours just to
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GREG FISHER CA(SA), MBA, is an associatefaculty member at the Gordon Instituteof Business Science (GIBS) and is currentlyresearching Technology E ntrepreneurshipthe University of Washington
BuIld your BusINEss As If It wErE A frANchIsE ANd dEfINE rolEs upfroNt
to BuIld A solId fouNdAtIoN. By grEg fIshEr
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orecasts
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I the business is currently enjoy-ing an overall 25% ROI, the questionthe owner must answer is, Should
I invest R300 000 in the addition
o the new product line to earn anROI that is nearly 9% less than my
business is currently earning(25% - 16% = 9%)? The correct an-swer appears to be an obvious no,
but there may be other businessreasons that would cause the ownerto decide to add this product line,
such as the presence o a strongmarket demand or the new items.
In any event, once each growth
strategy is converted into an ROI per-
centage, you can compare dissimilargrowth options, and ROI can be used
as a critical nancial componentin any business growth decision.Furthermore, just as ROI analysis can
be used to evaluate these additional
growth strategies, it also can be
to evaluate business ideas, suc
those o entirely new businesseAnd ortunately, ROI analysis ca
applied to these new business iwell beore an owner ever decidinvest in that new business.
d e f i n i n g t h e b u s i n e s s m od e f i n i n g t h e b u s i n e s s m o
Most entrepreneurs haveavailable to them morethan one way to grow their
businesses. The process o decidingon a growth strategy is ongoing, andthe decisions that result can be criti-
cal to uture success.The search or real business
growth, by creating permanent in-
creases in prot as a direct result omeasurable and sustained increas-es in sales volume, may not only
be a reaction to opportunities in the
marketplace, but also a requirementin order or your business to main-
tain market share.The right decisions can conceiv-
ably have a major positive impact on
your businesss bottom line, therebycreating real growth. However, iyou choose unwisely, or decide
to do nothing when action isclearly warranted, the resultscan lead to a loss o growth
potential, or even a period o
negative growth (decreasedsales and protability).
As with so many issues inbusiness, growth decisions shouldbe based on objective nancial data,
consisting o relevant estimates
and projections. Not every growthstrategy can be expected to impact
a business in the same manner, andover the same time period.
Think o your decisions in the
context o ROI analysis. Eachgrowth opportunity has an invest-ment component, rands you will be
required to spend as a part o theprocess o implementing a specicgrowth strategy. The corresponding
return you can expect rom yourinvestment in business growth can
be represented as the increasedprot your business is projectedto incur, directly as a result o thesales increases created by your
growth strategy.
or example: A retail business
is considering growing by addinga new product line. The requiredinvestment to add the line is
R300 000. This addition is expectedto add R200 000 in annual sales,
and as a direct result, a correspond-ing R50 000 increase in annual netprot. Thereore, the anticipated ROIrom this additional (product) line is
in excess o 16% (R50 000 dividedby R300 000).
smart tips: platform for rapid, steadY growth
Get Yur Plan in Actin03
the process
of deciding
on a growth
strategy is
ongoing,
and the
decisions
that result
can becritical
to future
success.
usE roI (rEturN oN INvEstMENt) to fINd thE Most fAvourABlE strAtEgy
to grow your BusINEss. By dAvId MEIEr
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Entrepreneur Media, Inc. All rights reser
s rdp:
1. All quality ti f
stati thinkin
2. Kp th plan sipl
3. mak tuh his
4. Fus n all phass f th
pss: assssnt, psit
plannin, iplntatin
5. gt yu idas/
assuptins hallnd
6. chk th roI
7. rvi ulaly
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d e f i n i n g t h e b u s i n e s s m o
3They generate real slutins.The big word today inbusiness is solutions, Jennings
says. But most companies arestill just selling stu, slammingboxes. Entrepreneurs who manage
to stay ahead o the competitioncreate authentic win-win solutionsor their customers. Jennings cites
the story o one entrepreneur whostarted out by sewing nursesuniorms, then began providing
all kinds o disposable items orhospitals, and now is taking overthe purchasing unction or entire
hospitals saving their customers
millions o rands in the process.Thats a win-win solution,
arms Jennings.
4They get eery eplyeet act like an ner.They do so by basing pay and
bonuses on the value eachperson adds to the business.You cant have everybody think
and act like an owner until youpay everybody like an owner,
Jennings stresses. Ownersdont get paid unless they createvalue, but i they create lots ovalue, they get paid a lot. I they
create tremendous value, they gettremendous pay.
5They base their businessa set fe r six aluesprinciples. It became very poa ew years ago or companiescome up with a loty set o 15
20 values, Jennings notes. Thung them on the wall, publish
them in the annual report andtalked about them once a yeacompany meeting. Then they wback to doing everything the w
they did it beore.
when an
entrepre-neur has a
manageable
number of
key prin-
ciples more
people are
able to make
decisions.
smart tips: platform for rapid, steadY growth
Jason Jennings the author oIts Not the Big That Eat the
Small... Its the Fast That Eat
the Slow and Think Big, Act Small
reveals the ve characteristics ocompanies that stay ahead othe competition:
1They hae executies h keep
their hands dirty. That meansentrepreneurs are on the rontlineswith customers at least 50% o thetime. Jennings explains: This helps
them keep their ngers on the pulsein the market they serve.
2They are uick t let g yesterdays breadinners.I a product, service or methodworked once but its day has
passed, they let it go. Theydont cling to the attitude that isomething has always been done
this way, it must be done this way,says Jennings. And they let go o
the idea that the CEOs ideas aresacrosanct. Businesses wastetoo much time trying to breathelie into something thats dead or
trying to make something workbecause its the CEOs idea.
fINd out whAt It tAkEs to gEt AhEAd of thE coMpEtItIoN. By MArk hENrIcks
Dinate Yur market04
more
infoi
big marketing
ideas or small
budgets
Log on to www.
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cost, highimpact ideas
k Pp
whn an ntpnu has
aabl nub f ky pinand vyn in th pa
kns th, ppl a
t ak disins. eply
dnt ait f th hiahy
disins, hih spds up
akin indibly.
Bin fast stayin aha
ptitin has nthin t
physial spd, Jnnins s
has t d ith thinkin fast
in fast, ttin t akt f
aintainin ntu. An
nly ay yu an b fast is
in su vybdy in th
kns h disins a
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d e f i n i n g t h e b u s i n e s s m o
The next step is to anticipate the
needs and concerns o each depart-ment through a measurement o the
pain they are likely to experience.For example, i you are supplyingparts or production, you might
guess that their pain includes thelost production time rom equip-ment breakage. In response, you
might oer to warehouse spareparts, so their equipment will nevergo down or long. Make the sugges-
tion beore it even occurs to them
to ask. Or, oer to provide them withparts on a consignment basis that
they can keep on the premises.In other words, the goal is to pro-
vide meaningul solutions that not
only generate additional business
or you, but also create a barrie
your competition.Once youve dened addition
products and services your acc
can use, determine to whom yoshould present your solution. Tstart preparing your presentati
initiating your marketing plan. ing a concentration o businessa legitimate concern. But by div
siying your existing account, ycan make your relationship mosubstantial. Is putting all your e
in one basket really so risky? Nyou hard-boil them rst.
smart tips: platform for rapid, steadY growth
05rAthEr thAN plANtINg NEw AccouNts, cultIvAtE thE rElAtIoNshIps wIth thE
custoMErs you AlrEAdy hAvE. By rAy sIlvErstEIN
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Its both a problem and a blessing:You have one or two very largeaccounts that make up the bulk
o your business. According to whatyou may have been told, such a con-centration is very risky; you should
never put all your eggs in one bas-ket. Or should you?
Most experts would advise you to
get more accounts, reducing yourconcentration o business. But yourmajor accounts are likely to grow at
a aster pace than your new ones.
The concentration will remain andyou will continue to be vulnerable.
Theres nothing wrong with tryingto grow other business. But Id liketo suggest a dierent approach.
Instead o reducing your businessconcentration, consider providingservices outside your core business
or activity. In doing so, youll addvalue to your account.
With that in mind, ask yoursel:
Do I know all the key players in-
volved in my main account? I not,get to know all the departments and
personnel involved in the account.The more you can learn about
your account, the more you can help
it with its endeavours. Knowing a
companys internal workings allowsyou to move seamlessly within the
business, solving more problemsand taking on more projects.
Bankers believe that i they touch
base with a customer ve or sixtimes, the probability o losing thataccount diminishes substantially. It
takes a great eort or a customer tomove all his or her business rom asource thats providing multiple ser-
vices. The same rule applies here.Knowing your customers busi-
ness gives you the knowledge toprovide extra value. This value maytranslate to oering any number oadditional services, rom packaging
and markings to engineering andsub-assemblies.
But dont just fy by the seat o
your pants. Create a customer mar-keting plan, a special plan just orthat key account. Starting with your
knowledge o the company, developaction plans or building relation-
ships in unamiliar departments.To do this, youll want to create
an organisation chart o your cus-tomers business, including all lines
o responsibility and authority thatimpact your product or service.
moreinfoi
beat the
competition
Log on to www.
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sales archiveor hundredso smart tips
knowing
your
customers
business
gives you the
knowledge
to provide
extra value.
Ray SIlvERStEIn is the president and fouPRO: Presidents Resource Organization, of advisory boards for small business ow Entrepreneur Media Inc. All rights rese
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Build in space and tie r
relaxatin znes. Providing areas,
such as chat spaces or coeerooms, where employees cangather, relax and interact.
Identiying and using the natural
cunicatin echaniss that
eerge in the rganisatin. For ex-ample, the ounder o Geek Squad,an IT services provider, discovered
that his employees used onlinecomputer games to interact andcommunicate with one another.
Duplicatin ert. With growththere is an increased risk that
two or more people carry out thesame tasks. Aim to create an openworkplace where people share
what they are doing and can seeand hear other employees. Openworkplaces are enabled with open
plan oces, shared coee breaks,social interactions at work andheightened communication
across the board.
Tp heay cpanies. As thebusiness grows, too many chiescan creep into the system. An
oversupply o bosses can slowdown decision making and cause
conusion among employees.Avoid having too many managand be clear on each manager
accountability. Ensure that emees know which chie does wh
ofce plitics. Nip it in the buwhenever you see or hear it an
avoid getting drawn in at all coSet the example.
Decisin akers islated r
the results their decisins
Get decision makers to the ro
line. In larger companies this o
requires a deliberate eort, buis critical. Managers must inte
with customers and ront lineemployees at least weekly.
Inertia. An unwillingness tochange. Create a burning plat
when change is required. Makpeople uncomortable with thstatus quo by highlighting the
rent reality and how that mayto a very bleak uture. Be visu
well as verbal in drawing peopattention to the need to chang
make people
uncomfort-
able with
the status
quo by
highlighting
the current
reality
and how
that may
lead to a
very bleak
future.
GREG FISHER CA(SA), MBA, is an associatefaculty member at the Gordon Instituteof Business Science (GIBS) and is currentlyresearching Technology Entrepreneurshipat the University of Washington
S m A R T T I P S S E R I E S
The concept o economieso scale implies that the
bigger the business gets, thecheaper it becomes to produce ordeliver products or services. This
happens because the more unitsthe business sells the more unitsthere are to absorb xed costs.However, as an organisation grows,
certain additional costs creep in.
These costs are real and in somecases the cost o growing big can
outweigh the benets.So as your business grows, be-
ware o the ollowing diseconomies
o scale:
the cost o
communication.
With organisational growth, it
becomes more and more dicultor employees to communicateeectively within the organisation.
To overcome this, business ownersshould consider:
Size atters. Keep teams and
business units small.
Create a irtual eeting space.
Consider collaborative online work
spaces such as discussion boardsor wikis
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T
here are two interpretations
o survival o the ttest. Therst and more widely accepted
is the idea o being competent and
able as in being physically t.This interpretation ts well with thesaying, Only the strong survive.
The second and less accepted in-terpretation is survival o the mostadaptive or fexible survival be-
longs to those who can t in a newenvironment.
In January this year, General Mo-
tors Corporation announced it was
seeking to cut costs by $11 billion(about R80 billion). It planned to
achieve these cost savings by reduc-ing worker healthcare benets, let-ting go o 30 000 workers and clos-
ing or consolidating a dozen plants.In that same month, Google
opened an oce in Phoenix. Sud-
denly, local companies were losingIT workers to the high pay and ben-ets Google was oering.
General Motors and Google are
examples o the two denitions osurvival o the ttest. Suddenly,
the biggest and strongest automak-er in the world was nding it moredicult to survive, simply because
it wasnt fexible or able to adapt.
At the same time, Google, ayoung company, ts into the new
economic environment and hasbecome the new 800-pound gorillao the business world.
The comparison o General Motorsand Google holds valuable lessonsor all entrepreneurs. What kind o
t do you and your company wantto be? Do you want to be t by be-ing the biggest and the strongest, or
by being adaptive and fexible? Areyou building a company that lookslike a muscle-bound bodybuilder,
or are you building a company thatlooks like a yoga instructor?
As an entrepreneur, my companys
growth and success are dependenton being strong as well as fexible.Adapting means keeping an open
mind and not becoming too attachedto yesterdays successes. It alsomeans hiring strong and fexible peo-
ple rather than bodybuilders bulkedup with degrees and corporate titles.
Though both types are strong, the
question is: Which body type and,ultimately, which company type, isbest designed or survival?
RobERt KIyoSaKI is author of the RichDad series of books, as well as an investor,entrepreneur and educator. EntrepreneurMedia, Inc. All rights reserved.
smart tips: platform for rapid, steadY growth
only the
strong
survive
(is one
interpreta-
tion.) the
second
and less
accepted in-
terpretation
is survivalof the most
adaptive
or flexible
survival
belongs to
those who
can fit in a
new envi-
ronment.
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