Is accumulating massive wealth still possible in business?
Yes- the answer to this question proves it.
It’s difficult to pin down the largest company owned entirely by one person, but Sir James Dyson may be at the top of the list. Joe Andon discussed Dyson in his Quora answer.
I just used my Dyson vacuum this morning, and you may have seen their commercials for their unique (and effective) vacuum design. As the firm’s website explains, James Dyson was frustrated with his vacuum’s diminished performance, due to the bag clogging. After 5 years and over 5,000 prototype designs, he created the first bagless vacuum. I’ll always buy a Dyson- they work great.
Dyson continued to innovate and create products, and the New York Times lists his net worth at over $6 billion. As Dyson says: “we are reinventing ourselves all the time.” That’s necessary to succeed in business. If you’ve had a business setback, this article may help.
The Lesson: Innovation can have a huge financial payoff.
Cargill earned over $2.8 billion on sales of $109 billion in its most recent fiscal year. This diversified firm operates in the food, agriculture, animal nutrition and metals industries, just to name a few. Alex Lieberman mentioned Cargill in his answer.
The firm is owned by the Cargill-MacMillan family, and 14 family members own 88% of Cargill. As of June of ’16, the combined net worth of the families is over $49 billion.
W.W. Cargill started a smack grain storage business in 1865, then earned wealth in railroads during America’s westward expansion.
The Lesson: A well-diversified business can generate steady growth over time.
Other large, privately held companies: Names you know
- Mars: The company known for candy brands like 3 Musketeers also owns petcare brands.
- Three large accounting firms: Deloitte, Ernst & Young, and PricewaterhouseCoopers all generate annual revenue of over $29 billion.
- Car rental: Enterprise Holdings owns Enterprise Rental and other car rental brands.
The Lesson: All of these companies sell simple, “low tech” products and services that people need. Sure, they all use tech, but their success did not come out of the tech boom.
Raising money and selling
This discussion is a reminder of a decision every business owner makes: do I sell ownership to raise capital? Issuing stock reduces the owner’s total ownership- which means giving up some control.
Food for thought.
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(website and blog) http://www.accountingaccidentally.com/
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This article was originally posted on my Quora page.
Image: Bullseye, Jeff Turner CC by 2.0