WHATEVER may be said in praise of poverty, the fact remains that it is not possible to live a really complete or successful life unless one is rich. No man can rise to his greatest possible height in talent or soul development unless he has plenty of money; for to unfold the soul and to develop talent he must have many things to use, and he cannot have these things unless he has money to buy them with.
A man develops in mind, soul, and body by making use of things, and society is so organized that man must have money in order to become the possessor of things; therefore, the basis of all advancement for man must be the science of getting rich.
The object of all life is development; and everything that lives has an inalienable right to all the development it is capable of attaining.
Man’s right to life means his right to have the free and unrestricted use of all the things which may be necessary to his fullest mental, spiritual, and physical unfoldment; or, in other words, his right to be rich.
In this book, I shall not speak of riches in a figurative way; to be really rich does not mean to be satisfied or contented with a little. No man ought to be satisfied with a little if he is capable of using and enjoying more. The purpose of Nature is the advancement and unfoldment of life; and every man should have all that can contribute to the power, elegance, beauty, and richness of life; to be content with less is sinful.
The man who owns all he wants for the living of all the life he is capable of living is rich; and no man who has not plenty of money can have all he wants. Life has advanced so far, and become so complex, that even the most ordinary man or woman requires a great amount of wealth in order to live in a manner that even approaches completeness. Every person naturally wants to become all that they are capable of becoming; this desire to realize innate possibilities is inherent in human nature; we cannot help wanting to be all that we can be. Success in life is becoming what you want to be; you can become what you want to be only by making use of things, and you can have the free use of things only as you become rich enough to buy them. To understand the science of getting rich is therefore the most essential of all knowledge.
There is nothing wrong in wanting to get rich. The desire for riches is really the desire for a richer, fuller, and more abundant life; and that desire is praise worthy. The man who does not desire to live more abundantly is abnormal, and so the man who does not desire to have money enough to buy all he wants is abnormal.
There are three motives for which we live; we live for the body, we live for the mind, we live for the soul. No one of these is better or holier than the other; all are alike desirable, and no one of the three–body, mind, or soul–can live fully if either of the others is cut short of full life and expression. It is not right or noble to live only for the soul and deny mind or body; and it is wrong to live for the intellect and deny body or soul.
We are all acquainted with the loathsome consequences of living for the body and denying both mind and soul; and we see that real life means the complete expression of all that man can give forth through body, mind, and soul. Whatever he can say, no man can be really happy or satisfied unless his body is living fully in every function, and unless the same is true of his mind and his soul. Wherever there is unexpressed possibility, or function not performed, there is unsatisfied desire. Desire is possibility seeking expression, or function seeking performance.
Man cannot live fully in body without good food, comfortable clothing, and warm shelter; and without freedom from excessive toil. Rest and recreation are also necessary to his physical life.
He cannot live fully in mind without books and time to study them, without opportunity for travel and observation, or without intellectual companionship.
To live fully in mind he must have intellectual recreations, and must surround himself with all the objects of art and beauty he is capable of using and appreciating.
To live fully in soul, man must have love; and love is denied expression by poverty.
A man’s highest happiness is found in the bestowal of benefits on those he loves; love finds its most natural and spontaneous expression in giving. The man who has nothing to give cannot fill his place as a husband or father, as a citizen, or as a man. It is in the use of material things that a man finds full life for his body, develops his mind, and unfolds his soul. It is therefore of supreme importance to him that he should be rich.
It is perfectly right that you should desire to be rich; if you are a normal man or woman you cannot help doing so. It is perfectly right that you should give your best attention to the Science of Getting Rich, for it is the noblest and most necessary of all studies. If you neglect this study, you are derelict in your duty to yourself, to God and humanity; for you can render to God and humanity no greater service than to make the most of yourself.
Tip I: “Somebody once said in looking for people to hire, you look for three qualities: integrity, intelligence and energy. And if you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without[integrity], you really want them to be dumb and lazy.”(Warren Buffet. Investor, Business Magnate)
Tip II: “If we weren’t still hiring great people and pushing ahead at full speed, it would be easy to fall behind and become a mediocre company.”(Bill Gates. Co-Founder Microsoft, Investor)A company represents the third stage in the evolution of business organizations, the first two being sole proprietorship and partnership respectively.
A company is an association of people formed for economic gain of its members who contribute money’s worth to a common stock (ordinary shares). A company has a right to act as a natural being granted by law.
Benefits of Running a Company
1. Limited Liability
If a client submits a compliant to the authorities and files a lawsuit against you. To protect the company assets, the company management can seek liability insurance for the business.
2. Doing what you Love
Working in an industry you are very passionate about keeps you in check during the toughest times. As a business owner you have the ability to innovate, create and contribute immensely to society and therefore gaining personal satisfaction.
3. Easy to acquire Funding
Companies have higher chances of obtaining loans and debentures since they can afford collateral security.
4. Huge Capital Base
The availability of capital is enormous due to the big membership and their contributions
5. Business Control
Owning your own business gives you the power to be a part of every step of the decisions made that help in building the business or else you could hire people to do that for you.
Risks of Running a Company
1. Hectic Schedule
Most business owners work very long erratic hours. Most people view hectic long work hours as a con but work schedules are mostly rough during the first days of the business. Business owners must handle most of time consuming administrative tasks as this responsibility lies in your hands, therefore you’ll experience days when you will have to spend most of the nights in the office to complete these tasks.
2. Financial Risks
You will get financial trouble along the way and that is part of being in business. All money invested in companies is always at risk. There is even a possibility that you will lose all your initial capital and even fail to pay back your business loans. Even with a well thought out plan, the economy it self is capable of drowning your business and forcing it’s closure
3. Stress
There are very many things to worry about as a business owner for example competition, bills to be paid, customer problems, faulty equipment. You are always going to be held responsible for the well being of the company employees
4. Undesirable Duties
You will often get very discouraged by the details of the company work for example doing paper work, but this will rarely affect you if you are passionate about your industry. You will also have to fire unproductive employees which will not be an easy task to perform.
5. Sacrifice:
When running a company you will have less time to yourself than you would have working for some one else. Unlike what you have heard about business in theory, the reality is that business is very time consuming.
Types of Companies
1-Statutory Company: This is a company formed by the Act passed either by the central or state legislature. Such companies are governed by their respective Acts and are not required to have an Articles of Association (AOA) and Memorandum of Association (MOA).
2-Registered Company: This is a company formed by registration under the Companies Act. The working of such a company is regulated by the provisions of the Companies Act, AOA and MOA. A registered company may be any of the following
(a) Limited by Shares Company:This is a company having the liability of its members limited by the memorandum to the amount unpaid (if any) on the shares respectively held by them.
(b)Limited by Guarantee Company:A Guarantee company in which the liability of its members is limited by the memorandum to such amounts as the members may undertake by memorandum to contribute to meet the deficiency of the assets of the company incase its being wound up
.c) Unlimited Company:This is a company that does not have any limit on the liability of its members.
3-Government Company:This is a company of which not less than 51% of the paid up capital is held by the central government.
4-Foreign Company:This is a company which is incorporated outside the country but with a place of business in the country.
5-Public Company:This is a company whose AOA does not contain requisite restrictions to make it a private company. A public company needs a minimum of seven persons for its registration.
6-Private Company:By AOA a private company is described by the following features
It is required by law to add the words “private limited” at the end of its name.
Restriction of membership to 50 persons excluding the past and present employees of the company who are members of the company.
It prohibits any invitation of the public to subscribe to its shares or debentures.
HOW TO INVEST MONEY I GENERAL PRINCIPLES OF INVESTMENT With the immense increase in wealth in the United States during the last decade and its more general distribution, the problem of investment has assumed correspondingly greater importance. As long as the average business man was an habitual borrower of money and possest no private fortune outside of his interest in his business, he was not greatly concerned with investment problems. The surplus wealth of the country for a long time was in the hands of financial institutions and a few wealthy capitalists. These men, the officers and directors of banks, savings-banks, and insurance companies, and the possessors of hereditary wealth, were thoroughly equipped by training and experience for the solving of investment problems and needed no help in the disposition of the funds under their control. During the last ten years, however, these conditions have been greatly altered. The number of business men to-day in possession of funds in excess of their private wants and business requirements is far greater than it was ten years ago, and is constantly increasing. These men are confronted with a real investment problem.
While they have not always recognized it, the problem which they are called upon to solve is really twofold—it concerns the safeguarding of their private fortune and the wise disposition of their business surplus. They have usually seen the first part of this problem, but not all have succeeded in clearly understanding the second. When the treatment of a man’s business surplus is spoken of as an investment problem, it is meant, of course, not his working capital, which should be kept in liquid form for immediate needs, but that portion of his surplus which is set aside for emergencies. It is coming to be a recognized principle that every business enterprise of whatever kind or size should establish a reserve fund. It is felt that the possession of a reserve fund puts the business upon a secure foundation, adds to its financial strength and reputation, and greatly increases its credit and borrowing capacity. The recognition of this fact, combined with the ability to set aside a reserve fund, has brought many men to a consideration of the best way in which to dispose of it. It is obviously a waste of income to have the surplus in bank-accounts; more than that, there would be a constant temptation to use it and to confuse it with working capital. Its best disposition is plainly in some safe interest-bearing security, which can be readily sold, so that it will be available for use if necessity demands.
Confronted with the double problem thus outlined, what measure of success has attended the average business man in its solution?
It is safe to say that the average man has found it easier to make money than to take care of it. Money-making, for him, is the result of successful activity in his own line of business, with which he is thoroughly familiar; while the investment of money is a thing apart from his business, with which he is not familiar, and of which he may have had little practical experience. His failure to invest money wisely is not due to any want of intelligence or of proper care and foresight on his part, as he sometimes seems to believe, but simply because he is ignorant of the principles of a business which differs radically from his own.
The investment of money is a banker’s business. When the average man has funds to invest, whether he be a business man or a pure investor, he should consult some experienced and reliable investment banker just as he would consult a doctor or a lawyer if he were in need of medical or legal advice. This book is not intended to take the place of consultation with a banker, but to supplement it.
The advantage of such consultation is shown by the fact that if a man attempts to rely on his own judgment, he is almost certain not to do the best thing, even if his business instinct leads him to avoid those enterprises which are more plainly unpromising or fraudulent. It should be remembered, however, that widows and orphans are not the only ones ensnared by attractive advertisements and the promise of brilliant returns. In most cases, widows’ and orphans’ funds are protected by conscientious and conservative trustees, and it is the average business man who furnishes the money which is ultimately lost in all propositions which violate the fundamental laws of investment.
The average man is led into these unwise investments through a very natural error of judgment. Accustomed to take reasonable chances and to make large returns in his own business, he fails to detect anything fundamentally wrong in a proposition simply because it promises to pay well. He forgets that the rate of interest on invested money, or pure interest, is very small, and that anything above that can only come as payment for management, as he makes in his own business, or at the sacrifice of some essential factor of safety which will usually lead to disaster.
For the successful investment of money, however, a good deal more is required than the mere ability to select a safe security. That is only one phase of the problem. Scientific investment demands a clear understanding of the fundamental distinctions between different classes of securities and strict adherence to the two cardinal principles, distribution of risk and selection of securities in accordance with real requirements.
One of the most important distinctions is that between promises to pay and equities. Bonds, real-estate mortgages, and loans on collateral represent somebody’s promise to pay a certain sum of money at a future date; and if the promise be good and the security ample, the holder of the promise will be paid the money at the time due. On the other hand, equities, such as the capital stocks of banking, railway, and industrial corporations, represent only a certain residuary share in the assets and profits of a working concern, after payment of its obligations and fixt charges. The value of this residuary share may be large or small, may increase or diminish, but in no case can the holder of such a share require any one, least of all the company itself, to redeem the certificate representing his interest at the price he paid for it, nor indeed at any price. If a man buys a $1,000 railroad bond, he knows that the railroad, if solvent, will pay him $1,000 in cash when the bond is due. But if he buys a share of railroad stock, his only chance of getting his money back, if he should wish it, is that some one else will want to buy his share for what he paid for it, or more. In one case he has bought a promise to pay, and in the other an equity.
It is not the intention, from the foregoing, to draw the conclusion that equities under no circumstances are to be regarded as investments, because many of our bank and railroad stocks, and even some of our public-utility and industrial stocks, have attained a stability and permanence of value and possess sufficiently long dividend records to justify their consideration when investments are contemplated; but it is essential that the investor should have a thorough understanding of the distinction involved.
The principle of distribution of risk is a simple one. It involves no more than obedience to the old rule which forbids putting all one’s eggs in the same basket. The number of men who carry out this principle with any thoroughness, however, is very small. Proper distribution means not only the division of property among the various forms of investment, as railroad bonds, municipals, mortgages, public-utility bonds, etc., but also the preservation of proper geographical proportions within each form. Adherence to this principle is perhaps not so important for private investors as for institutions. A striking instance of the need for insistence upon its observance in the institutional field was furnished by one of the fire-insurance companies of San Francisco after the earthquake. It appeared that the company’s assets were largely invested in San Francisco real estate and in local enterprises generally, where the bulk of its fire risks were concentrated. As a result, the very catastrophe which converted its risks into actual liabilities deprived its assets of all immediate value. This instance serves to show the importance of the principle and the necessity for its observance.
The principle of selection in accordance with real requirements is more complex. It involves a thorough understanding of the chief points which must be considered in the selection of all investments. These are five in number: (1) Safety of principal and interest, or the assurance of receiving the principal and interest on the dates due; (2) rate of income, or the net return which is realized on the actual amount of money invested; (3) convertibility into cash, or the readiness with which it is possible to realize on the investment; (4) prospect of appreciation in value, or that growth in intrinsic value which tends to advance market price; and (5) stability of market price, or the likelihood of maintaining the integrity of the principal invested.
The five qualities above enumerated are present in different degrees in every investment, and the scientific investor naturally selects those securities which possess in a high degree the qualities upon which he wishes to place emphasis. A large part of the problem of investment lies in the careful selection of securities to meet one’s actual requirements. The average investor does not thoroughly understand this point. He does not realize that a high degree of one quality involves a lower degree of other qualities. He may have a general impression that a high rate of income is apt to indicate less assurance of safety, but he rarely applies the same reasoning to other qualities. When he buys securities, he is quite likely to pay for qualities which he does not need. It is very common, for example, when he wishes to make a permanent investment and has no thought of reselling, to find him purchasing securities which possess in a high degree the quality of convertibility. From his point of view, this is pure waste. A high degree of convertibility is only obtained at the sacrifice of some other quality—usually rate of income. If he were to use more care in his selections, he could probably find some other security possessing equal safety, equal stability, and equal promise of appreciation in value, which would yield considerably greater revenue, lacking only ready convertibility. Thus he would satisfy his real requirements and obtain a greater income, at the expense only of a quality which he does not need.
The quality of convertibility divides investors into classes more sharply than any other quality. For some investors convertibility is a matter of small importance; for others it is the paramount consideration. Generally speaking, the private investor does not need to place much emphasis upon the quality of convertibility, at least for the larger part of his estate. On the other hand, for a business surplus, ready convertibility is an absolute necessity, and in order to secure it, something in the way of income must usually be sacrificed.
Again, some investors are so situated that they can insist strongly upon promise of appreciation in value, while others can not afford to do so. Rich men whose income is in excess of their wants, can afford to forego something in the way of yearly return for the sake of a strong prospect of appreciation in value. Such men naturally buy bank and trust-company stocks, whose general characteristic is a small return upon the money invested, but a strong likelihood of appreciation in value. This is owing to the general practise of well-regulated banks to distribute only about half their earnings in dividends and to credit the rest to surplus, thus insuring a steady rise in the book value of the stock. Rich men, again, can afford to take chances with the quality of safety, for the sake of greater income, in a way which poor men should never do. In practise, however, if the writer’s observation can be depended upon, it is usually the poor men who take the chances—and lose their money.
In the quality of safety, there is a marked difference between safety of principal and safety of interest. With some investments the principal is much safer than the interest, and vice versa. This can best be illustrated by examples. The bonds of terminal companies, which are guaranteed as to interest, under the terms of a lease, by the railroads which use the terminal, are usually far safer as to interest than as to principal. While the lease lasts, the interest is probably perfectly secure, but when the lease expires and the bonds mature, the railroads may see fit to abandon the terminal and build one elsewhere, if the city has grown in another direction, and the terminal may cease to have any value except as real estate. On the other hand, a new railroad, built in a thinly settled but rapidly growing part of the country, may have difficulty in bad years in meeting its interest charges, and may even go into temporary default, but if the bonds are issued at a low rate per mile and the management of the road is honest and capable, the safety of the principal can scarcely be questioned.
Stability of market price is frequently a consideration of great importance. This quality should never be confused with the quality of safety. Safety means the assurance that the maker of the obligation will pay principal and interest when due; stability of market price means that the investment shall not shrink in quoted value. These are very different things, tho frequently identified in people’s minds. An investment may possess assured safety of principal and interest and yet suffer a violent decline in quoted price, owing to a change in general business and financial conditions. In times of continued business prosperity very high rates are demanded for the use of money, because the liquid capital of the country, to a large extent, has been converted into fixt forms, in the development of new mines, the building of new factories and railroads, and in the improvement and extension of existing properties. These high rates have the effect of reducing the price level of investment securities because people having such securities are apt to sell them in order to lend the money so released, thus maintaining the parity between the yields upon free and invested capital.
As an illustration of this tendency, within the last few years New York City 3½-per-cent bonds have declined from 110 to 90, without the slightest suspicion of their safety. Their inherent qualities have changed in no respect except that their prospect of appreciation in quoted price has become decidedly brighter. Their fall in price has been due to two factors, one general and the other special—first, the absorption of liquid capital and consequent rise in interest rates, occasioned by the unprecedented business activity of the country, and, second, to the unfavorable technical position of the bonds, due to an increased supply in the face of a decreased demand.
It will be seen that the question of maintaining the integrity of the money invested is a matter of great importance and deserves to rank as a fifth factor in determining the selection of investments, altho it is not an inherent quality of each investment, but is dependent for its effect upon general conditions. If it is essential to the investor that his security should not shrink in quoted price, his best investment is a real-estate mortgage, which is not quoted and consequently does not fluctate. For the investment of a business surplus, however, where a high degree of convertibility is required, real-estate mortgages will not answer, and the best way to guard against shrinkage is to purchase a short-term security, whose approach to maturity will maintain the price close to par.
The foregoing comments, in a brief and imperfect way, serve to indicate the main points which should be considered in the selection of securities for investment. The considerations advanced will be amplified as occasion demands in the following pages. For the present, the main lesson which it is sought to draw is the necessity that a man should have a thorough understanding of his real requirements before he attempts to make investments. For a private investor to go to a banker and ask him to suggest a security to him without telling him the exact nature of his wants is about as foolish as it would be for a patient to go to a physician and ask him to give him some medicine without telling him the symptoms of the trouble which he wished cured. In neither case can the adviser act intelligently unless he knows what end he is seeking to accomplish.
It is plainly impossible within the limits of a small volume to consider the needs of all classes of investors. Special attention will be paid to the requirements of a business surplus and of the private investor. In the field of private investment two distinct classes can be recognized—those who are dependent upon income from investments and those who are not. Both classes will be considered. For the investment of a business surplus, safety, convertibility, and stability of price are the qualities to be emphasized; for investors dependent upon income, safety and a high return; and for those not dependent upon income, a high return and prospect of appreciation in value. In the following chapters railroad bonds, real-estate mortgages, industrial, public-utility, and municipal bonds and stocks will be considered in turn; their advantages and disadvantages will be analyzed in accordance with the determining qualities above enumerated, and their adaptability to the requirements of a business surplus and of private investment will be discust.
Entrepreneurs fulfill the following three dominant roles −
Economic Change
Social Change
Technological Change
These are referred to as behavioral roles. All entrepreneurs have these common characteristics and decide to become an entrepreneur due to the factors or circumstances in their lives which made them think the way they do.
To do their work effectively and operate a successful business, these entrepreneurs should perform certain roles. These roles are the same as the basic managerial roles. All such roles are listed out in detail as follows −
Figure Head Role
The entrepreneur needs to be the Head in the organization and participate in ceremonial duties, such as representing the organization in formal and informal events or even being the public spokesperson whenever there is a press release, etc.
Leader Role
The entrepreneur should also act as a leader because an entrepreneur may need to bring people with dissenting views and approaches to work together as a team. So, he needs to be good with his people management and leadership skills. He has to lead the people by hiring, firing, training and motivating his resources as and when necessary.
Liaison Role
The entrepreneur should also be the liaison officer for his organization. He should be the source of link with the outside world and business houses, always trying to find an opportunity of working together with other big organizations.
Monitor Role
The entrepreneur acts as a regulatory body too; he monitors both the internal and the external environment of the business constantly.
Information Provider and Receiver Role
The entrepreneur should also act as the organizational representative and transmit information internally and externally the organization.
Spokesman Role
The manager should also act as the spokesman of the business and transmit information internally and externally the organization. He needs to be the source of knowledge about his company to potential investors and collaborators.
Entrepreneurial Role
This is the basic role of the entrepreneur; he/she declares new ideas for the organizations, brainstorms it with the employees and friends and then bears the risk of any unsuccessful implementation.
Disturbance Handler
The entrepreneur needs to act as the mediator and bring people with dissenting thoughts to the table and get them motivated to work together. He needs to handle all conflicts and get the team to focus constantly on the goal.
Resource Allocator
The entrepreneur needs to find out how the available resources can be allocated between different departments of the organization to suit their demands and necessities. This helps them achieve the organizational goals and the objectives.
Negotiator Role
The entrepreneur must negotiate on behalf of the organization both internally with the staff as well as with the external investors or collaborators. At such opportunities, the entrepreneurs need to be more focused on their role of being a ‘win-win” deal breaker.
Added Roles of an Entrepreneur
Apart from the above-mentioned roles, there are some specific entrepreneurial roles that a person is supposed to fill up in his duties of an entrepreneur. These are divided into three categories, which are as follows −
Social Roles,
Economic Roles, and
Technological Roles.
Let us now discuss each of them in detail.
Social Roles of Entrepreneur
Creating opportunities for entrepreneurship.
Creating job or employment opportunities in the society.
Engaging in social welfare services of redistributing income and wealth.
Transforming a standard working procedure into a more modern approach.
Economic Roles of Entrepreneur
Bearing the risk of failing in business.
Mobilizing the revenue of the organization properly.
Utilizing human resources in a cost-efficient manner.
Providing channels of further economic growth in the organization.
Technological Roles of Entrepreneur
Changing traditional technology to modern system.
Adapting improved technology to business environment.
Utilization of available technology in the production process.
Developing efficiency and competence in the workforce through technology
One of the things a shrewd career-shifter would ask about the new career they’re getting into is how much they’ll be making when they start selling houses. In the case of new and upcoming real estate agents, it all depends on how successful they are and how much work they “actually” put into their job.
As most of you may know, real estate agents don’t follow a fixed schedule. They work on their own terms, and unless they are diligent in following leads and closing the deal, they won’t be able to make a sale.
How are agents compensated?
Real estate agents make a living based on sales commissions. This commission is split between the seller’s agent and the buyer’s representative, and their respective brokers (all agents have to work for one). So, if you do the math, you can see that agents will be able to make around one-fourth of the total commission of the sale.
Conventionally, this commission shares five to eight percent of the property listing price. This price will be split among the agents who will take about 30 to 75 percent, depending on their experience or how new they are to the job.
What do statistics say?
According to the National Association of Realtors (NAR), the annual median income of real estate agency is $40,000 in 2010. Per sale, the average commission ranges between five to six percent of the listing price although this may be higher or lower depending on the jurisdiction and the brokerage that employs the agent. Agents sell half a dozen of properties on average annually, according to the NAR.
Which party pays for the commission?
You may wonder where the commission comes from. So, who pays for it? Often times, it is paid for by the buyer. It may seem like both parties will be sharing the commission fee, but if you think about it, it’s the buyer who always assumes the fee as the commission is always part of the listing price and not paid beforehand by any party.
Where do all the money go?
When commissions are paid to the listing agent, he or she will have to split it with his or her broker. Why? It’s because brokers are the ones who spend time and money in dressing the house and promoting it through advertising. If the broker and house owner have signed an exclusivity agreement for the listing, the broker will assume the receipt of a full commission since they have the exclusive rights to sell the house, regardless if the homeowners have sold the property themselves.
On the other hand, when the buyer’s agent receives his or her commission from the seller’s agent, he or she will have to share it with his or her broker. This commission will be split equally or depending on the percentage agreed upon by the brokers and agents of both parties.
To sum it up, the amount of money a real estate agent can make in a year will generally depend on the number of properties they’ve sold within that period. To earn more, an agent has to work diligently in pursuing leads and expanding their network.
Based on their working relationship with the business environment they are functioning in, various types of entrepreneurs can be found. The chief categories are these four types of entrepreneurs, i.e.
Innovative entrepreneurs,
Imitating Entrepreneurs,
Fabian Entrepreneurs, and
Drone Entrepreneurs.
Let us now discuss each of them in detail.
Innovative Entrepreneurs
This type of an entrepreneur is more interested in introducing some new ideas into the market, organization or in the nation. They are drawn towards innovations and invest a lot of time and wealth in doing research and development.
Imitating Entrepreneurs
These are often disparagingly referred to as ‘copy cats’. They observe an existing successful system and replicate it in a manner where all the deficiencies of the original business model are addressed and all its efficiencies are retained.
These entrepreneurs help to improve an existing product or production process and can offer suggestions to enhance the use of better technology.
Fabian Entrepreneurs
These are entrepreneurs that are very careful in their approaches and cautious in adopting any changes. They are not prone to sudden decisions and try to shy away from any innovations or change that doesn’t fit their narrative.
Drone Entrepreneurs
These are entrepreneurs who do not like a change. They are considered as ‘old school’. They want to do business in their own traditional or orthodox methods of production and systems. Such people attach pride and tradition to even outdated methods of doing business.
Tip: “Great things in business are never done by one person they are done by a team of people.” (Steve Jobs, Co-founder, Chairman and CEO Apple Inc.)
Many small businesses such as professional practitioners, retail, service providers are organised as partnerships. Partnerships are very essential in the business world and are in fact considered as the second stage in the evolution of the business first being sole proprietorship.
A partnership is an agreement between two or more people who have decided to enter into business with the intention of earning profits. Partnerships may be established formally by means of a partnership deed or agreement. The partnership agreement is a very important guide for partnerships to exist in harmony.Business Startup Many small businesses such as professional practitioners, retail, service providers are organised as partnerships. Partnerships are very essential in the business world and are in fact considered as the second stage in the evolution of the business first being sole proprietorship.
A partnership is an agreement between two or more people who have decided to enter into business with the intention of earning profits. Partnerships may be established formally by means of a partnership deed or agreement. The partnership agreement is a very important guide for partnerships to exist in harmony.
Contents of a Business Partnership Agreement ● Names of the business partners ● Nature and kind of business ● Capital contributed by partners ● Interest on the Capital (if it exists) ● Salaries paid to the active partners ● Drawings to be made by the partners ● Interest on the drawings(if it exists) ● Duties of the partners ● Valuation of goodwill ● Duration of the partnerships
Benefits of Starting a Business Partnership 1. Skills and Experience Starting partnerships with people who have different qualifications gives the business potential to thrive.
2. Risk is Spread With an increased number of business owners, the losses incurred are shared among many.Business Startup Competence among workforce will be encouraged and this will therefore enhance the staff’s professional skills.
5. Stability and Impact Achieving greater reach by being effective and efficient implies an increased and sustained development impact.
Risks of Starting a Business Partnership 1. Implementation Challenges Day-to-day demands of delivering a partnership programme as a collaborative venture, with all the additional management, tracking, reporting and evaluation requirements that entails
2. Drain on Resources Commitment of time and energy of key staff in partnership building and project development in addition to any additional financial or other resource contributions
3. Negative Reputation When partnerships go wrong causing damage to the reputation or track record of individual partners by association.Business Startup When partnerships go wrong causing damage to the reputation or track record of individual partners by association.
3. Negative Reputation 4. Loss of Autonomy The challenge of shared decision-making processes; the need for building consensus with partners before action can be taken and the implications of wider accountability (to other partners and to wider beneficiaries)
5. Unlimited Liability Members have unlimited liability which implies that in the event of the business winding up the proceeds from the business assets cannot cover the obligations therefore partners are called upon to raise funds towards the debts incurred.
Types of Partners 1. Nominal Partner: This is a person whose name is used as if he or she was a member of the firm, but who in reality is not a partner. He or she is liable to the third parties who give credit to the firm on the strength of he or she being a partner in the business.Business Startup This is a person whose name is used as if he or she was a member of the firm, but who in reality is not a partner. He or she is liable to the third parties who give credit to the firm on the strength of he or she being a partner in the business.
2. Partner in Profit Only: This is a partner who only shares the profits but does not share the losses made. He or she does not take part in the management of the business but is liable to third parties who deal with the partnership.
3. Sub Partner: This is a partner who gets the shares of profit from the firm through one of the partners. He or she is not liable against the firm and is not liable to the third parties for the firm’s debts.
4. Dormant Partner: A dormant or sleeping partner is a partner who does not actively take part in the day to day partnership activities. Although he or she does not participate in the daily running of the business he or she has a right to the books of accounts and also sharing of profits and losses in the agreed ratios.
5. Minor Partner:Business Startup This is a person whose name is used as if he or she was a member of the firm, but who in reality is not a partner. He or she is liable to the third parties who give credit to the firm on the strength of he or she being a partner in the business.
Dissolution of a Partnership 1. Losses Considering profits are no longer being generated by the partnership, the partner may agree to dissolve the partnership.
2. Tragedy Incase something tragic occurs to the business such as government intervention into the business for failing to follow regulations or death of a partner.Growth of the business to an extent of requiring converting the partnership into a limited company for day to day operations to continue smoothly.
3. Expansion Assuming the partners no longer agree on business operations within the firm then dissolving the partnership is the rational thing to do.
4. Irreconcilable Differences 5. Retirement Mutual agreement between the parties when one or more of the partners retire(s) or has he’s/her partnership(s) contract expires.
The real estate industry is one of the most dynamic industries to be in. For many people it is an attractive business to enter because of potential high profits and flexible work hours. In addition, barriers to entry are generally low compared to other white collar professions and industries. But ultimately, getting a real estate sales agent license is a somewhat complicated (and potentially time consuming) process that requires patience and a good bit of effort.
1. Taking the State Exam and Applying for Your License
Find the official website of your state’s real estate regulatory body. Every state has a regulatory body that governs real estate laws and real estate sales agents within its jurisdiction. The website of your state’s regulatory body will explain all of the specific requirements that you’ll have to meet to become licensed in that jurisdiction.
Go to USA.gov to find the official website for your state.
Oftentimes, state real estate regulatory bodies are under the division of commerce, insurance, or business regulation.
Feel free to visit your state’s regulatory body offices in person. You might learn more talking to someone than if you try to figure things out on the internet.
Choose a real estate education school. Your state’s real estate regulatory body will provide you with a list of state-approved schools and real estate education courses that meet their requirements for licensure. Make sure to read this list carefully so that the school you pick is indeed a school that is approved by the state.
Enroll in the real estate education course. After you’ve selected an approved school and course, enroll in the course. Real estate education courses are the primary educational requirements for real estate licensing in most states. As a result, these courses are very important and required. Take your course work seriously.
Real estate education courses can be completed in person or online, depending on the school that offers them.
Courses generally take between 30 and 90 hours, depending on your state requirements.
Courses are generally concluded with a course exam. This is different than the state real estate exam. The course exam is created to make sure you’ve done the work on the course and understand what you have learned.
Complete the real estate education course.Completing the course is no simple task. If you complete it online, you’ll move through a dozen or more modules that will include a wide variety of information. If you complete it in person, you’ll spend a week or more in a classroom for eight hours a day (depending on the hour requirement). Make sure to read or listen carefully, take good notes, and review all of the information you’ve covered. Generally, these courses include information on:
Credit scores
Risk management
Foreclosures, short sales, real estate owned properties (REO) and real estate auctions
Real estate ethics
Study hard for your state exam. After you’ve completed and passed the real estate education course, you’ll need to prepare for your state exam. State exams are difficult and many people don’t pass the exam the first time around. You’ll increase your chances of passing the test if you are thoroughly prepared. There are books and online resources that you can use to study. Take as many practice tests as you can until you are confident you can pass the examination. Search online or ask your school to recommend real estate prep examinations.
Keep in mind that each state exam is different. Take practice exams only for the state in which you will be licensed.
Register for and take the state exam. Depending on the state, you’ll either have to forward your course completion information to the state or testing company, or you’ll be automatically scheduled for a state exam once you complete the course. Either way, the state exam will be the culmination of your real estate education.
Most states require either a 70% or 75% score to pass the exam.
Exams are held in testing centers and generally take several hours.
Many states allow you to retake the exam several times.
You might be required to arrive up to 30 minutes before the exam begins.
Make sure to bring photo ID.
Your test results will, in many states, be automatically sent to the regulatory authority.
Apply for your license. After you’ve taken the appropriate education and passed the exam, you need to formally apply for your license. Some states might have you begin the application process before taking the exam, but many do not allow you to apply until you’ve passed the exam. Regardless, after you’ve passed your exam, you will have to contact the regulatory agency in your state that governs real estate.
Make sure you have the appropriate forms.
Contact the regulatory authority to make sure they’ve received the results of your test and your education completion.
You’ll probably have to pay a license fee at this stage.
The amount of time it takes the state to process your application will vary. Some states like Florida process applications almost instantly, while other states like Tennessee might take two weeks or longer.
2. Learning the Basic Requirements of Licensure
Understand basic requirements to enter real estate sales. Each state has different requirements, and your real estate license is only good in the state that has granted it. Regardless of where you live, however, you must meet the basic requirements:
You must be at least 18 years old.
You must be a high school graduate.
You must have a Social Security number.
You must satisfactorily pass the state licensing examination in the state you want to work. (There is no such thing as a National real estate license.)
Generally, most states require you to take a real estate education course that familiarizes you with common practices and state laws that govern the real estate market.
Save enough money to pay for related costs of licensing. The cost of licensing in every state varies, but generally costs are very similar; however, costs go beyond state fees for licensing and include a number of things. Prepare yourself to pay for:
A real estate education course. This could range from $200 to $500 per course. Some states require multiple courses.
A real estate exam fee. Real estate exam fees range from $30 to $120 depending on the state.
Fingerprinting and a background screening. Fingerprinting and screening can cost between $30 and $60.
State licensing fees. These fees can range from $10 to over $100.
Errors and omissions insurance. This can range from $125 a year to much higher depending on coverage.
Association or board dues. These fees can be anywhere from $300 a year to $1,000 or more.
Some states, like Texas, require good standing on any student loans guaranteed by the state before you can obtain your license.
MLS and electronic key charges. These fees can range from $25 a month to $100.
Learn about affiliation with a real estate company or broker. In most states, in order for your license to be active and valid, you need to be affiliated with a real estate broker and sign up with them as an independent contractor. If you’re not affiliated with a broker and you practice real estate, you might be breaking the law and could be subject to heavy fines.
Real estate sales agents can’t practice real estate on their own and must be supervised by a broker.
In many places, a broker won’t accept you on unless you’ve joined the board or association to which they belong. This is often a requirement of many boards and associations.
The broker is charged with supervising and overseeing all of their agent’s activities.
Investigate whether you need to join a real estate board or association. Most regions of the country have real estate boards or associations which you’ll have to join to gain many of the tools to practice real estate in your area. Real estate boards and associations offer:
Education courses that help you keep your license and expand your certification.
A way to meet and build connections with other real estate sales agents.
Access to the multiple listing system for the region. The multiple listing system is a system in which real estate sales agents post their listings with specifics and is often accessible only by other real estate sales agents.
Access to electronic key systems that allow entry to homes. This is extremely important if you want to show a home to a customer/client.
Know what it means to be a “Realtor.” The term “Realtor” is a trademarked term by the National Association of Realtors (NAR). While all Realtors are real estate sales agents, not all real estate sales agents are Realtors. The term Realtor indicates membership in local real estate associations/boards and the NAR. Benefits of being a Realtor or doing business with a Realtor include:
Realtors are bound by a specific code of conduct and ethics enforced by the NAR.
Realtors have access to tools like the multiple listing system (MLS) and more than distinguish them from real estate sales agents.
The term “Realtor” is a branded term that the NAR has worked hard to associate with honesty and integrity.
3. Starting Your New Career
Find a broker. After you’ve applied for your license, you should start looking for a firm and a broker to work for. In most places it is illegal for you to practice real estate on your own. This is because it is the duty of an experienced broker (someone who has practiced real estate for more than three to five years) to supervise you and mentor you.
Sign the independent contractor agreement with your broker.
Shop around for a broker. Some firms and brokers charge their agents fees “desk fees” (a monthly fee to use their office and supplies). Some firms and brokers allow generous commission splits (for instance, you take 90% of the commission you earn, and they take 10%). In addition, the culture and interest level of brokers vary. Find a firm and broker you are comfortable working with.
Maintain a good relationship with your broker, as he or she will be invaluable to your success.
You’re not a real estate sales agent until you’ve signed on with a broker.
You’re not a Realtor until you’ve signed on with a broker and your local association or board.
Purchase errors and omissions insurance if required by your state. Errors and omissions insurance is insurance that protects you, the real estate sales agent, from liability if you make an error or omit something from a contract when conducting business. Some states require individuals to purchase their own insurance, or show proof of coverage, before they are granted their license and start practicing.
Keep abreast of changes in your career field.Once you’ve got your license and are signed up with a firm, you need to keep up to date on changes in real estate law and practice. This is important, as regulatory agencies and state legislatures are always changing laws. To be successful, you need to know the law and know it well. You also need to understand common practices and other things that will benefit your customers.
Complete education hours required by your state. These range from nine to 14 hours every year or two, though agents renewing for the first time may be required to complete up to 45 hours of courses.
Complete education hours required by your local board or association. These range from none to 12 or more.
Attend conferences and conventions. At conferences and conventions you’ll hear experienced Realtors talk and you’ll have the chance to attend workshops and courses that will benefit you immensely.
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