Learning From the Young Rich

Learning From the Young Rich – Part 1
Every year BRW magazine publish “The Young Rich List”. The list includes the 100 wealthiest people in Australia under 40 and is read religiously by most people who are looking to create wealth.

The more I have seen in business, the more I have learnt the importance of learning from people who have the results you are looking for. These days many people are willing to give advice, the question is what advice do you take on?

Given that the average wealth of the people listed in the Young Rich List is $65.5 million, I think we can trust that these people, at least for the most part, know how to make money. Everyone in the list is self-made and has therefore not inherited any of their wealth. James Packer has never been featured in the Young Rich List.

Lessons:

1. Think big, start small. “Before you achieve that first $1 million, you have to get your first dollar.” Phillip Di Bella started a coffee business in 2002, selling coffee to cafes. He would roast his own coffee in a machine that he rented and would then pack it and deliver it himself, doing the books for the business on his girlfriends computer.

   Sometimes people can have a romantic idea of what it is to be an entrepreneur, usually these ideals are shattered rather quickly when they realise that it’s not all glamour in the beginning.

   Having said that, it can pay off. Phillip Di Bella is now worth $47 million and is still dedicated to delivering a quality product to his loyal customers. “My promise to them, and it’s a very simple principle I’ve kept, is that I’ll do for my customers what others are not prepared to.”

2. Never too young. Trent Davis started his company NetBox when he was 22. This was his third business, after his first two businesses had failed. Learning from the first two businesses, Davis went into NetBox with what he calls a “one foot on the brake approach.”

   Now 32, David has built NetBox into a formidable company with annual sales of $30 million and 20 staff. Having started the business at 22, he remembers the sacrifices he had to make in order to get started early. “It was two-and-a-half years before I was taking home a proper wage, which is quite a long time to be living like a university student when you’re not at university anymore.”

3. Fake it until you make it. An important skill of any start-up or small business is to be able to look bigger than you are. Entrepreneurs are masters at giving the impression they are a large organisation, when in fact they live in a studio apartment and had to catch the tram just to meet with you.

   Stuart and Nicole Patterson started a building repair business when they were 24 and 23 respectively. Because they were dealing with large clients, they understood the importance of looking the part. They started the business in their rented two bedroom apartment – this was their office. Nicole would answer the phone as “the receptionist” and would direct the different calls to different people (different people being Stuart) in a number of different “departments”.

   Business is about delivery and it’s also about show-business. Thanks to such a convincing performance, Stuart and Nicole have grown Pattersons Building Group into a company with revenues of $42 million per year and 70 staff.

   Although the performance was a convincing one, they always understood the importance of delivery. “We delivered. We never failed a client. We had built a reliable network behind the scenes.”

   Go to Part 2 of Learning From the Young Rich