What happened to GE, formerly one of top companies in US, what Jack Welch has wrought?

Every generation needs a revolution - an entrepreneurial revolution

GE used to be darling of Wall St.   It was tops of the top 20 companies 20 years ago.

What caused its decline:

1.  Investing too much in non core business:   lending, health care.  The GE capital was badly hurt by 2008 crisis.   They had to be bailed out to the tune of $100 billion   It stood against the management principle of focus, on core business.  What was GEs core business:    Jet Engines, power generation.   They could have been growth more.  The acquistions distracted them from core businesses

2.  They engaged in too much acquisition .  However they financed this by cutting off employee payroll.

They destroyed their human capital.  The staff worried too much in being laid off.

Jack Welch was an idol before in management.  It seems it was a misplaced adulation.  

 

Using OPM to expand business

Every generation needs a revolution - an entrepreneurial revolution

Most businesses expand, or operate business doing the OPM -  others people money, Not their own money.  They call this leveraging  What are the methods/or application of this method?:

      1.  Bank loans;

      2.  IPO -  partial sale of equity

      3.  Suppliers credit

      4.  Down payment

      5.  Accelerated payment from customers (offering discounts for cash payment)

So instead of making it appear that the company needs the money, the perception is changed by saying:

      1.  Bond sale

      2   IPO

 What they mean really is they are taking your money, in exchange for higher interest or dividends to finance their growth.

Expanding the business and obtaining finance thereto is not a black art or rocket science

It really needs boldness and courage to go on leverage.  And have uncanny sense of the future that your product or service will sell, and that you can sustain the cash flow to repay the loan, pay the interest, or in the case of equity, to pay back dividends and or the principal (in case this is a private placement -  not listed at the bourse)

Thus a smart businessman does not have to fork out all his savings to finance his business expansion.  He leverages!   He uses other people's money.   Capital here means CAPITO.  Using ones head to obtain more funds for the business.

Thus its a poor excuse that one can not start business because one lacks capital.  There are many ways by which start up can take off.   It takes imagination, hard work and persistence

What resource does an entrepreneur have? a super Brain

                                                                                       

I have oft repeated that strategy is nothing more than a choice of Key Resources and Key Activities that an entrepreneur use to achieve his objectives.  But more often than not, unlike a corporate animal, an entrepreneur does not have much to show in terms of material resources:   manpower, machinery, and most especially money.  (The often stated problem of start up is lack of capital!)

But the Paolo's report that your brain gives you UNLIMITED RESOURCES should negate that kind of thinking.  Your brain has unlimited access to ideas, solutions to problems, networks and even other resources.  and even how to obtain money.  Entrepreneurs really should have UNLI ingenuity and courage to succeed.  Brain power should make him succeed.  Super brain by Deepak by Deepak Chopra

Your brain is your capital.  Capita means head.

10 ways to start a business with almost no money

From Globe and Mail | January 31, 2013

How often do we hear the common complaint of start ups, or entrepreneur wanna bees that their biggest concern is the lack of capital.  Nothing can further from the truth.

The capital lies right on top of their shoulders, or right between the ears!

What --- their heads!

Capital comes from capito which is a Latin word for head (thus provincial capitol, army captain, per capita).  The biggest capital of the entrepreneur is his head

Thus entrepreneur can start a business, or any business, without money and that makes entrepreneur truly strategic ie achieving his dream with little or no resources and fulfilling the definition of entrepreneur - ie "starting something with practicality nothing"

Last night, I talked about us starting a bank with almost l00% borrowed money from a rural bank in neighboring town, or starting a real estate project with just P15,000.  Toby's started with just P3,000.00  Splash was started by Drs. Hortaleza with P12,000, one half of the cash gift on their wedding.

Here are some of the 0 money start-up strategies:

1.  Clarify the concept.  What is the customer problem that the entrepreneur wants to solve?  How will the company solve the problem?  What is the product that the entrepreneur wants to come up with? (What pisses you off, the customer, the user etc and come up with the prototype product.  No expensive r and d or thousands of trial needed;   just prototype the product. Hire beg steal or borrow!)

2.  Wireframe the product (Do the prototype, if you can do 3d printing so much the better)  Picture exactly how the product will come up

3.  Do market research (or FGD, or beta testing of your prototype)

4.  Network, network network

5.  Study in the street, university of life

Find out the 5 other strategies.

Remember focus on what you can sell;  prioritize your cap ex/efforts on the product, and not on other irrelevant products/stuff