As far as business is concerned, there are two prerequisites for survival in the market: strategy and hard work. There is no such thing as constant and unchallenged supremacy. The case of the Forbes 400 proves that fortunes can change quickly and unpredictably in numerous circumstances. What made the difference for these remarkably rich people are the skills and the determination to stay in the game.
Drawing lessons from the Forbes 400, we can note the fact that very few or none of the companies in the list began as huge businesses. Steve Forbes, editor of the Forbes magazine, Chief Executive Officer of Forbes Inc., and himself an established business tycoon, stressed that these businesses started as small ventures. The owners did not inherit the businesses – they created them. They crafted the design, the working schemes, the internal dynamics, the products, and the services; among others. Forbes made it clear that in the market battleground, there is no unshaken aristocracy; there are no invulnerable competitors. The business owner has to be skilful in calling the shots of ‘making something happen.’
Next, to ‘stay in the game,’ one has to understand the true meaning of wealth. If we are in the context of businesses and the market, wealth is not simply the iconic piles of gold, jewels and money all around you. The business owner, more often than not, dismisses this ‘fairytale-ish’ or the ‘commercial ad-ish’ representation of wealth. For him or her, the focus is on the primary determinants of wealth.
This now brings us to the question, “What generates wealth?” Forbes said that it is the “value that people put on the asset.” One of the classic principles in economics tackles the factors behind every demand curve; two of which are the preferences and the price and accessibility of alternative goods. The business owner, therefore, has to possess sheer knowledge about the prevailing preferences in the market and has to learn how to manipulate variables to increase profit. “If the people suddenly don’t like what you offer or if somebody does it better, then the value disappears,” Forbes said.
Indeed, the business owner must know how to answer the crucial question. Will the product or service be preferred over other competitors? More importantly, what will give the product the edge over the other?
Now, the hardest part is the fact that the tastes or preferences of the consumers are always changing. In fact, conditions in the market are characterized by vicissitudes. Thus, there are changes in the factors that determine supply and demand. The cost of manufacturing a product or offering a service can increase dramatically; or some other powerfully decisive exogenous change can take place in the market. There can be an unexpected depreciation of machines, or even political turmoil that creates an atmosphere hostile to vibrant economic activity, among others. In the smaller scale, changes happen more quickly than they do at the macro level. Hence, the owners of small businesses are most familiar with the speed in which conditions can change, Forbes said.
The competent business owner, therefore, must know how to respond to such changes. He or she is never lax; and never assumes that favourable business conditions are eternal. Forbes shared his father’s favourite quote, “if you think you’ve arrived, you’re already shown to the door.” True enough, the businessman, if anything, knows that the market is also characterized by the survival of the fittest, and adaptation is a necessary feat.