Sam Walton

 Sam walton’s 10 Principles of running a successful

business

1) Commit to your business.

2) Share your profits with your associates and treat them like your partners.

3) Energize your colleagues.

4) Communicate everything you possibly can to your partners.

5) Appreciate everything your associates do for the business.

6) Celebrate your success.

7) Listen to everyone in your company.

8) Exceed your customers' expectations.

9) Control your expenses better than your competition.

10) Blaze your own path.

"There is only one boss - the customer. And he can fire everybody in the company from the
chairman on down, simply by spending his money somewhere else."

Growing Up

Sam Walton's career in retail began in 1940 when he become a sales trainee in Des Moines, Iowa
at a J.C. Penney store. Despite his enthusiasm to serve the customers, Walton was not a model
employee. His desire to make his customers happy was so great that he often let other
responsibilities like paperwork and keeping the books fall by the wayside. He was almost fired
by his boss who told him that he was not cut out for a career in retail. Walton kept his job,
however, because of his ability as a great salesman.

In 1942, Walton was drafted into the United States army. He worked in the communications
division of the Army Intelligence Corps and remained on home soil throughout the Second
World War. When he left the army three years later, Walton was married, had a child, and
decided to start his own business to support his new family. With the $5,000 that he had saved
along with a $20,000 loan from his wife's father, he purchased a Ben Franklin variety store in
Newport, Arkansas. Walton was 27 years old.

Starting The Business

By putting in many hours at the store and implementing a pricing strategy far below what his
competitors were charging, Walton's new business took off. By 1950 he had the top performing
Ben Franklin store in the area. Walton's landlord, seeing his success, decided that he wanted
Walton to sell the store to his son. When Walton refused, the landlord decided not to renew
Walton's lease and he was forced to shut down.

Walton's 10 commandments for business success were:

1) Commit to your business.

2) Share your profits with your associates and treat them like your partners.

3) Energize your colleagues.

4) Communicate everything you possibly can to your partners.

5) Appreciate everything your associates do for the business.

6) Celebrate your success.

7) Listen to everyone in your company.

8) Exceed your customers' expectations.

9) Control your expenses better than your competition.

10) Blaze your own path.

Determined as ever to succeed in his venture, Walton looked for other rural Arkansas towns for a
new place to set up shop. He came across a small village called Bentonville and opened the
Walton's Five and Dime in 1950. He made sure to get a 99-year lease this time on the property.
The two local competitors in Bentonville did not want to discount their prices and Walton's
business began to flourish.
Realizing he had a recipe for success, Walton began looking for other areas of expansion. He
borrowed money and used the profits from his first stores to acquire more. By 1960, he owned
15 stores but he was not getting the kind of return on investment that he thought he would be
making. He then made the decision to follow a heavy price cutting strategy and hope to get much
higher volume to turn a larger profit. This was not a new idea. The problem at the time was that
most discount stores were small,located in urban areas, and focused on specialty items. Walton's
plan was to change the way retailing was done across the country.

Building An Empire

Walton's revolutionary plan was to have large superstores in rural towns that discounted a wide
variety of products. His initial approach was to Ben Franklin. They turned him down as they did
not like the idea of operating with lower margins. Without a large company behind him, Walton
opted to go it alone. In 1962, he mortgaged his home and borrowed against everything he owned
to open his first Wal-Mart in Rogers, Arkansas, a neighboring town of Bentonville.

Excited about the prospects of getting discounts and selection that were previously only
obtainable in the cities, rural customers came out in droves to his store. The success of his first
store allowed him to expand and by 1969 he had 18 Wal-Marts in Arkansas and Missouri.

Funded solely through debt and reinvested profits, Walton decided that in 1970 he would take
the company public. The IPO raised $5 million and Walton retained 61 percent of the company.
The money was used to settle the company's debts and fuel further expansion. By 1980, 276
Wal-Marts were operating.

An integral component of Wal-Mart's success was its leveraging of new technologies to improve
efficiencies and save costs. Walton knew that the key to success in a low margin business was to
rigidly control his costs. Wal-Mart was, for example, one of the first major retailers to use
electronic scanners at the registers which tied to an inventory control system so they could know
immediately which items were selling well and needed to be re-ordered.

The success of his Wal-Mart stores led Sam to another idea - Sam's Wholesale Clubs. These
would be discount stores that sold to small business owners in bulk. The idea was another big hit
for Walton and by 1985 he was considered by Forbes magazine to be the richest man in America
with an estimated net worth of $2.8 billion.

Similar to Ray Kroc, Sam Walton did not invent retailing, he simply changed the business model
and way of doing business to make it a much more profitable venture.

Evan is an entrepreneur and international speaker. At the age of 19, he became an owner and
Chief Operating Officer in Redasoft, a biotechnology software company. The company quickly
grew to over 300 organizations as clients, including NASA and Johnson & Johnson, in 30
countries. He started Evan Carmichael & Associates with the goal to give entrepreneurs the
motivation to follow their passion and the strategies they need to succeed. Evan has delivered
over 100 keynote presentations to entrepreneurs in North America, Europe, and Asia. He has
been interviewed by newspapers, radio stations, and television stations including CHUM FM,
CityTV, Global TV, OMNI TV, Enterprise, and the Toronto Sun. Evan's website,
http://www.evancarmichael.com is the world's #1 website for small business motivation and
strategies.

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