Page 297 - merged.pdf

CHAPTER 9 GROWING YOUR BUSINESS EMPIRE

Subsequently, these shares will then be traded between investors
on the stock exchange and the market price of your company
will eventually rise as your company’s profits & value increases.
Investors holding on to these shares (including you and your
other shareholders) will benefit financially as the share price
increases. For example, if the share price of your company
doubles to $0.26, your wealth will double to $15.6 million.

You can see why taking their company public is a dream that
many entrepreneurs have. It is a way to multiply their wealth
by many times over. In fact, most billionaires in the world
never made their money through their salary or profits from
their companies. Rather, their billion-dollar net worth came
from seeing the value of their shares multiply as a result of
the stock market.

Although Warren Buffet’s annual salary has remained at just
US$100,000 over the last 50+ years, he is now the world’s
richest man with a net worth of US$60 billion. This is because
the shares that he owns in his company (Berkshire Hathaway)
have increased from $8 a share (1962) to $116,500 a share
today (2008). When Google’s founders Larry Page and Sergey
Brin listed their company in 2004 at the IPO price of $85 a
share, they became instant billionaires with net worth’s of
US$7.2 billion each. When Google’s share price subsequently
shot up to $750 per share in 2007, their wealth jumped to
$18.5 billion (they had sold some shares initially).

So What’s the Catch to Be a Billionaire?

So, is there a catch to listing your company and joining the
$100 million- billion-dollar league? You bet there is! I must
admit that when I first started my businesses, I too had the
eventual goal of taking my company public. It would allow
me to massively increase my net-worth within a short period

288 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES