Sam Walton: 10 Rules for Building a Successful Business : PowerHomeBiz.com

Sam Walton, the founder of Wal-Mart, grew up poor in a farm community
in rural Missouri during the Great Depression. The poverty he
experienced while growing up taught him the value of money and to
persevere.


After attending the University of Missouri, he immediately worked for
J.C. Penny where he got his first taste of retailing. He served in
World War II, after which he became a successful franchiser of Ben
Franklin five-and-dime stores. In 1962, he had the idea of opening
bigger stores, sticking to rural areas, keeping costs low and
discounting heavily. The management disagreed with his vision.
Undaunted, Walton pursued his vision, founded Wal-Mart and started a
retailing success story. When Walton died in 1992, the family’s net
worth approached $25 billion.





Today, Wal-Mart is the world’s #1 retailer, with more than 4,150
stores, including discount stores, combination discount and grocery
stores, and membership-only warehouse stores (Sam’s Club). Learn Sam
Walton’s winning formula for business.

Rule 1: Commit to your business.

Believe in it more than anybody else. I think I overcame every single
one of my personal shortcomings by the sheer passion I brought to my
work. I don’t know if you’re born with this kind of passion, or if you
can learn it. But I do know you need it. If you love your work, you’ll
be out there every day trying to do it the best you possibly can, and
pretty soon everybody around will catch the passion from you — like a
fever.

Rule 2: Share your profits with all your associates, and treat them as partners.

In turn, they will treat you as a partner, and together you will all
perform beyond your wildest expectations. Remain a corporation and
retain control if you like, but behave as a servant leader in your
partnership. Encourage your associates to hold a stake in the company.
Offer discounted stock, and grant them stock for their retirement. It’s
the single best thing we ever did.

Rule 3: Motivate your partners.

Money and ownership alone aren’t enough. Constantly, day by day,
think of new and more interesting ways to motivate and challenge your
partners. Set high goals, encourage competition, and then keep score.
Make bets with outrageous payoffs. If things get stale, cross-pollinate;
have managers switch jobs with one another to stay challenged. Keep
everybody guessing as to what your next trick is going to be. Don’t
become too predictable.

Rule 4: Communicate everything you possibly can to your partners.

The more they know, the more they’ll understand. The more they
understand, the more they’ll care. Once they care, there’s no stopping
them. If you don’t trust your associates to know what’s going on,
they’ll know you really don’t consider them partners. Information is
power, and the gain you get from empowering your associates more than
offsets the risk of informing your competitors.

Rule 5: Appreciate everything your associates do for the business.

A paycheck and a stock option will buy one kind of loyalty. But all
of us like to be told how much somebody appreciates what we do for them.
We like to hear it often, and especially when we have done something
we’re really proud of. Nothing else can quite substitute for a few
well-chosen, well-timed, sincere words of praise. They’re absolutely
free — and worth a fortune.

Rule 6: Celebrate your success.

Find some humor in your failures. Don’t take yourself so seriously.
Loosen up, and everybody around you will loosen up. Have fun. Show
enthusiasm — always. When all else fails, put on a costume and sing a
silly song. Then make everybody else sing with you. Don’t do a hula on
Wall Street. It’s been done. Think up your own stunt. All of this is
more important, and more fun, than you think, and it really fools
competition. “Why should we take those cornballs at Wal-Mart seriously?”

Rule 7: Listen to everyone in your company and figure out ways to get them talking.

The folks on the front lines — the ones who actually talk to the
customer — are the only ones who really know what’s going on out there.
You’d better find out what they know. This really is what total quality
is all about. To push responsibility down in your organization, and to
force good ideas to bubble up within it, you must listen to what your
associates are trying to tell you.

Rule 8: Exceed your customer’s expectations.

If you do, they’ll come back over and over. Give them what they want —
and a little more. Let them know you appreciate them. Make good on all
your mistakes, and don’t make excuses — apologize. Stand behind
everything you do. The two most important words I ever wrote were on
that first Wal-Mart sign: “Satisfaction Guaranteed.” They’re still up
there, and they have made all the difference.

Rule 9: Control your expenses better than your competition.

This is where you can always find the competitive advantage. For
twenty-five years running — long before Wal-Mart was known as the
nation’s largest retailer — we’ve ranked No. 1 in our industry for the
lowest ratio of expenses to sales. You can make a lot of different
mistakes and still recover if you run an efficient operation. Or you can
be brilliant and still go out of business if you’re too inefficient.

Rule 10: Swim upstream.

Go the other way. Ignore the conventional wisdom. If everybody else
is doing it one way, there’s a good chance you can find your niche by
going in exactly the opposite direction. But be prepared for a lot of
folks to wave you down and tell you you’re headed the wrong way. I guess
in all my years, what I heard more often than anything was: a town of
less than 50,000 population cannot support a discount store for very
long