Dick Smith left school when he was just 15 and landed himself a job in a factory. He quickly realised the only way he would see success would be to set up and run his own business.
By age 24, he was working for two-way radio company West Way Electronics, which decided it was no longer going to service Manly Cabs. Smith saw his opportunity and grabbed it, and with $600 of his own money and $10 from his fiancée he set up a business fixing the two-way radios for Manly Cabs. It wasn’t long before Smith realised there wasn’t much money to be made servicing radios, so he began selling them too.
From these humble beginnings, Smith went on to found Dick Smith Electronics, Dick Smith Foods and Australian Geographic, and is now one of Australia’s most prominent businessmen and personality.
In this Q&A interview, Smith discusses how business has evolved over the years, how to deal with change and why most businesses fail.
Q. What makes starting and growing a business harder now, in comparison to 10-20 years ago?
It is harder today because globalisation means most businesses are huge. With globalisation there’s so much competition and so many big companies that it would be very difficult to do the same thing.
Q. How did you go about building the Dick Smith Electronics brand we know today?
I did quite well from the start; my accountant actually told me after 6 months that I had made more money then the Prime Minister of Australia.
I then realised that even though I was doing well, making money through labour was not going to help me become wealthy. It wasn’t till I walked into an electronic components shop where I received poor service that I decided to start my own business.
Within 10 years I had 50 shops around Australia and eventually sold it to Woolworths for $25 million.
Q. What skills would you look for in a new business partner now versus 10-20 years ago?
I look for people who are disciplined, who work hard and can stay focused. They have get up and go, an enthusiastic energy and are happy to ask for advice. I think these characteristics are very important.
Q. How do you deal with certain changes in business?
I love change because I’m a risk taker, whereas most people hate change. In business you have to go with change given that society changes all the time. I used to always look ahead of my time, knowing that things were going to change.
Q. What are the most important lessons you’ve learned in business?
The most important lesson I have learned is to learn from your mistakes. I have made every mistake possible in business but I have never made the same mistake twice.
Q. What was the main reason you started your own business?
The main thing for me was to have freedom in what I did. Because I had no qualifications and didn’t do too well academically, I thought that if I started my own business it would be the best thing for me and where I was heading.
When I started my own business I had no idea that I would be wealthy. I saw a company called Howard Car Radio at Chatswood, which had 4 employees. I said to my fiancé at the time, “wouldn’t be great if we could open up our own business and have employees working for us?”
My accountant actually had to sit down with me and tell me that I was a millionaire – up until that point I wasn’t aware that I was even a millionaire!
Q. What are some of the reasons why most businesses fail?
Most businesses fail because they don’t look at having decent profit margins and they don’t look at keeping the overheads low.
Q. What drives you in business?
The adrenalin pumping excitement that success gives, I love responsible risk taking, I love competition, I love winning and being the best.
Q. What is success to you?
You really judge success in a business by being profitable – you have to look at it in a monetary way.
Q. What piece of advice do you have for entrepreneurs looking to start or grow their own business?
Ask for advice and model the success of others. Find someone who is successful and ask for advice.
Surround yourself with quality people, people who know more than you. My success is a direct reflection of the people I have mixed with over time as well as my modelling others who are successful, keeping focused and asking lots of great questions.
This interview and article is courtesy of Alex Pirouz.