10 lessons from a Billionaire

Recently, Forbes published their 2007 list of the 400 richest people in the world. #54 on this list is C.D. Spangler Jr. With a net worth over $2 billion USD, one would hardly recognize Spangler from any person in the Charlotte, NC suburbs where he resides. While I rarely, acknowledge anyone willing to do business with Bank of America, he did share some of his life's lessons in an interview with a Harvard Business School columnist back in July of 2001, http://www.hbs.edu/entrepreneurs/pdf/dickspangler.pdf

1) Make your mistakes while you're young so you can learn and recover from them.

Like the stock market, there are times when you must make decisions without complete information. Harvard Business School taught students to quickly assess alternatives and choose the best one before a competitor swooped in and stole your ideas and your edge.

2) Leverage wisely.

You won't always know if an investment will yield higher returns than your borrowing rate, but understanding current market conditions will help you determine when it is time to be aggressive or conservative in your leveraging decisions. Borrowing money to build apartments or warehouses in high demand locations and offering rentals at attractive prices can result in monthly cash flows during uptrending markets.

3) Know what the worth of the business or item you want to sell.

With the availability of the Internet, it's much easier today to determine the fair market value of any item or service. Especially when the prospective buyer will always say, "That's a little high."

4) Get rid of lousy leaders and ineffective managers.

Notice he said, get rid of the ones RUNNING the organization. NOT the people working for the organization.

5) Hire people who are smarter than you, especially those who have talent in specialized fields.

Most hiring managers don't hire the best candidate for open positions and what usually happens is the lost candidate is hired by their #1 competitor.

6) Don't hire or hang around people just like you are.

Diversity in thought and action is needed to prevent a groupthink atmosphere. Ever heard of the phrase, "if one jump off the cliff, they all jump off" An organization (such as one of Trump's divisions, where everyone dresses (in $3k suits that nobody can afford) and acts (if they work for Trump they think they're invincible), that is an organization built for disaster. Does someone want to explain how Trump Taj Mahal went from being the destination casino of Atlantic City in 1990 to just another casino by 2003?

7) Prioritize your challenges.

It is ok to defer or delay an important decision if you making progress on solving a challenge. Sometimes its better to have ten small challenges on your plate than one all encompassing challenge.

8) Look at the numbers from the real world, NOT from projections.

The market is the final arbiter in any decision. Stubborn refusal to accept what the market is telling you results in losses and lost opportunity in another area.

9) Get financing for business ideas if you want to earn a return on investment.

Having a business line of credit allows you to focus on generating sales and profits versus figuring out how to meet next month's payroll or fund inventory purchases to meet orders.

10) Let someone else be first to come up with a solution, so you can second it and make everyone feel they collectively came up with the decision.

In the "Me" generation, seems everyone wants to feel special. Ever notice, when you propose a great idea that there's a lukewarm reception to it; but then a few days later, someone else, will pitch the same idea and generate great euthusiasm. While its disheartening, you have to decide if the benefits of working with the group exceed the costs of dealing with office politics. If the answer is yes, then this is one of those sacrifices you may have to endure. But at least, don't sign away your patent, copyright, or trademark.