SOWPub Small Business Forums - Benjamin Franklin on Succeeding in Business...

People remember Benjamin Franklin for his role at the beginning of the formation of the United States, or for his kite experiment, or the invention of bifocals. However, we often don't remember that he was also a very successful businessman! (Through his printing press.)

I sometimes save snippets of things I come across, to read over and remember...

Anyway, here is something I came across and saved not too long ago.

Benjamin Franklin wrote some wise words on attaining wealth. Here it is (with some of my own commentary)... He called it...

Quote:

Advice to a Young Tradesman, Written by an Old One

"Remember, that time is money. He that can earn ten shillings a day by his labour, and goes abroad, or sits idle, one half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent, or rather thrown away, five shillings besides.

My late father was an economist, and from him I learned that what Benjamin Franklin is talking about here is what economists call "opportunity cost".

Essentially, it is the cost of NOT doing something, when you could potentially be doing something.

For example, you can sit around and watch TV for a couple hours. If you do that every day for 3 weeks, that's 42 hours you spent watching TV.

In that 42 hours (which is 1 week of work, if you work 8 hours a day for 5 days), you could have possibly written an ebook, and started selling it. Let's say you sell your ebook for $10 each, and you eventually sell 100 copies of it, for a total of $1,000 (let's say it's all profit, to make it easy).

Then, that 2 hours of watching TV for 3 weeks cost you $1,000 in "opportunity cost", because that time could have potentially made you an extra $1,000.

I think it's a powerful concept to be aware of...

Quote:

"Remember, that credit is money. If a man lets his money lie in my hands after it is due, he gives me the interest, or so much as I can make of it during that time. This amounts to a considerable sum where a man has good and large credit, and makes good use of it.

This just means that if you borrow money, you can potentially make it profitable. For example, you can invest it, or use it to buy something and resell it at a profit (i.e. "chatteling"), or use it to help start a profitable business.

Quote:

"Remember, that money is of the prolific, generating nature. Money can beget money, and its offspring can beget more, and so on. Five shillings turned is six, turned again it is seven and threepence, and so on, till it becomes a hundred pounds. The more there is of it, the more it produces every turning, so that the profits rise quicker and quicker. He that kills a breeding-sow, destroys all her offspring to the thousandth generation. He that murders a crown, destroys all that it might have produced, even scores of pounds."

This just means that if you have money, it can make you more money. I'm sure you can figure out many ways this is true (note: the casino is the WRONG answer! :) )

The flip side of that is that, if you waste $10 dollars by spending it on things that DON'T generate money, then you are not only "killing" that $10 bill, but also all the "children" which that $10 bill could have produced, and its "children's children", and so on to the thousandth generation! (That sounds like a lot of money!)

There's more, though I think these are the most fundamental! You can read the rest here... http://www.historycarper.com/resourc...bf2/advice.htm

I'm a big fan of Mr. Franklin, in case you couldn't tell. :)

Best wishes,

Dien