Wisdom in brand building from the man who started the Hilton Hotel Group, Conrad Hilton.
Conrad Hilton wasn’t born into money, in fact after his father lost all of their money in The Panic of 1907, also known as the Bankers’ Panic, he had to start from the bottom. But it was there that he discovered his love of the hotel industry and he set about working towards his first hotel purchase – the 40-room Mobley Hotel in Texas in 1919. He was 32 years old. In 2010, his son Barron Hilton’s net worth was a mind boggling $2,5 billion.
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I learnt that you don’t get anywhere by sitting comfortably in a chair.
Conrad Hilton was a huge proponent of action, believing that successful people always keep moving, even after failure. He famously said “Success is never final; failure is never fatal.” As a business person, successes only comes through action, and wrong decisions are only righted by action.
When you start planting acorns, the full-fledged oak may take years. As I grew in business I was beginning to learn what all gardeners must know – patience.
Building a business empire, or even a lifestyle business is not a get-rich-quick scheme. In fact it can take years before you begin seeing a return on your investment. Like oak trees, you’ll need to ensure hard times, there will be stretches of fine weather, but the key to survival is understanding that what you put in is what you’ll get out. This takes diligence, determination and patience.
The trick in packing a box is to pack a full box. This has nothing to do with crushing or crowding, only the intelligent use of what is available. The manner in which wasted space is unearthed and utilised can been the difference between a plus and a minus in an operation. And a very exciting part of the game.
Hilton’s first hotel was 40 rooms and he famously griped it had too much wasted space, converting the dining room to accommodate another 20 more beds. Even as a successful and profitable business owner, always look for improvements that will make your business more streamlined and efficient, and perhaps even open new revenue streams. For the younger entrepreneur, how important is that swanky office space in Sandton when you can convert the garage into a suitable office space?
I have never once in my life asked anyone to follow me financially into an adventure when I was not willing to take the lead with my own money. There is a yoke of responsibility that attaches itself firmly the minute someone trusts you with their capital and this means work, work, and more work.
It’s simple. Don’t ask investors for money when you haven’t invested everything you’ve got first. This skin in the game acts to reassure prospective investors that their money is in good hands. Similarly really analyse your business and its spending to determine whether investors are truly necessary. Could your business work through bootstrapping?
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Did you ever think what can happen to a plain bar of iron worth about $5,00? The same iron when made into horseshoes is worth $10,50. If made into needles, it’s worth $3 250, and if turned into balance springs for watches it’s value jumps to $250 000. The buyer is entitled to a bargain. The seller is entitled to a profit. So there is a fine margin in between where the price is right. I have found this to be true to this day whether dealing in paper hats, winter underwear or hotels.
Part of what makes a business successful is its perceived value by the customer. Take a close look at your concept to determine if you’re offering the best service or product, at a price your customer is prepared to pay, that it solves a problem that needs solving, and that you enjoy a good profit margin for your efforts.
What I began to do immediately was to buy first-mortgage bonds, sometimes as low as 20 cents on the dollar. I used this technique to acquire large hotels because, if I had enough bonds, when the time came to try for the purchase, my foot was already in the door.
Conrad Hilton was in his 40s when The Great Depression hit. He acquired the Sir Francis Drake Hotel, which had originally cost $4 100 000 to build, for a cash outlay of $275 000.
“I found that the nation was full of fine hotels, four-fifths of which had been lost by their original owners, had gone into receivership, or offer to buy, or wound up in the hands of people who knew nothing about hotels and regarded these properties as ‘depression White Elephants.’ They were there for the taking and at depression prices. All a man needed was a little capital and a lot of faith."