I believe in learning from those who have
succeeded. When it comes to profits, I study the writings of those who are great
J. Paul Getty was one of those. He made big money in oil exploration,
and made another fortune in art collection and evaluation. In the mid-1960s, he published
a book which was a collection of essays, called "How To Be Rich."
Here's one of Getty's pieces of advice
. On how to achieve the
Getty says that he believes that most people fall into one of four
1. Those people who work best when they are working for themselves.
They don't want to be employed by anyone, and want complete independence. The don't care
for the security that they get from a salaried job. Instead, they want to create their
own security on their own, and keep their own future in their own hands. In short,
they want to be their own bosses, and take the responsibilities and risks which is
associated with this.
2. Those people who for whatever reason, don't want to go into business
for themselves, but work best when they are employed by others and share in the profits of
the business. In this category you'll find the top-flight salespeople, who like to earn a
commission for everything they sell, to some of the world's top executives.
3. Those who only want to be salaried employees, who work best when
they are employed by others and they enjoy the security of a good salary. They are content
with receiving a regular salary with the hope of the occasional raise. According to Getty,
they don't have the initiative and independence, and maybe also the self-confidence, of
those on the first two groups.
4. Those who work for others but who have a consistently negative
attitude towards their jobs and employers. Their motivation is low. Their work could in
fact even be a drain on the businesses they are working for.
I think Getty is probably right, and you probably can divide people
into these general four categories
. In the small business world, everyone talks
about person of type number 1. But there is nothing wrong if you fit into one of the other
categories (well, except perhaps category number 4, which isn't a very flattering
This gets back to what Gordon Alexander is constantly saying
What do you want? What do you enjoy?
Getty then starts to talk about what he calls the "Millionaire
Mentality." Here's what he says
"Like it or not, there is a thing that can be called The
Millionaire Mentality. There is a frame of mind which puts an individual a long way ahead
on the road to success. In short, The Millionaire Mentality is one which is always and
above all cost-conscious and profit-minded. It is most likely to be found among men in the
first two categories I have cited."
How to be Rich by J. Paul Getty, p. 41
There's the concept, floating around in Getty's time, and still
floating around today, which says "You have to think BIG to make a profit."
Getty says that no other concept has been more widely misinterpreted.
YES - you must have imagination. You have to be farsighted. You must
have dreams. You have to be willing (according to Getty) to spend and risk money (OR your
time - I would add). BUT only when the expenditure is justified, and the risk is carefully
calculated and you can see it's worth it.
About this, Getty says
"In my opinion, it's more important for the man with The
Millionaire Mentality to be able to think small than to think big - in the sense that he
gives meticulous attention to even the smallest details and misses no opportunity to
reduce costs in his own or his employer's business."
How to be Rich by J. Paul Getty, p. 43.
Essentially, according to Getty, you HAVE to be profit-conscious. That
means doing things like keeping to a budget. You can't just spend with an open-hand on
anything you fancy. That's a big mistake some people make in business (and it's something
I have to watch myself)
I once read a story about a group of people who decided to start a
consulting company. The first thing they did was rent out an office in the expensive part
of town. They furnished their office with the most costly furniture. They had the highest
quality custom-made curtains, the most fashionable mahogany desks, the most expensive
plush carpet. It was a wonderful place to work - they spent a lot of money making sure it
was so. The only problem - they had no customers. They went bankrupt in just a few months.
In some ways, Getty took his penny-pinching to its extreme in his
personal life, and I wouldn't recommend that. But in your business, it's good to keep an
eye on costs, and be conscious of where profits can be increased, and costs reduced
without affecting those profits.
So if someone asked him advice on how to make money, this is the way
that Getty would reply. Now, how can you use it yourself?