Regardless of what business we work in, we are always interested in hearing the success stories of billion dollar corporations. We love to hear humble origin stories of how these companies started in basements, with one person and a dream. As fantastical as it may sound to hear these stories and apply to them our own lives, there are actually incredibly useful lessons to be learned from the business plans and operating methods of these companies. From dog walkers in Denver to movers in San Antonio, there are lessons that all business owners can learn from these dramatic success stories. Let’s take a closer look at some of the world’s most profitable companies and how exactly they stay on top.
Raise the topic of successful companies with anyone and Apple is bound to come up within the first minute. This is for good reason – Apple is basically untouchable in terms of profits. In 2016, the company brought in $45.7 billion, even after a 14% profit sink. So how exactly does Apple stay on top? Not only do they offer desirable products like iPhones, iPads, Macs, and iPods, but they are also intertwined with massive content operations like the App Store and iTunes. This is why even with declines in iPhone and iPad sales, the company still comes out on top.
Apple also offers some of the highest dividend-paying stock in the world, which means that people are eager to invest in the company. Perhaps most important, however, is the level of customer loyalty that Apple enjoys. 92% of iPhone users report that they will purchase another iPhone for their next phone, even when many argue that smartphones from other companies are now offering more. Other brands simply cannot compete with this loyalty.
Although many of us may not be familiar with Berkshire Hathaway, most of us have probably heard of Warren Buffett. Buffett, who runs Berkshire Hathaway, is one of the most famous investors of all time – and for good reason. In 2016, the company made $24.1 billion, its highest earnings in history. The company wholly owns household names like GEICO, Dairy Queen and Fruit of the Loom, but also energy businesses and railroads.
In addition to being an incredibly savvy investor, buying his first stock at 11, Buffett is incredibly generous. He has committed to giving away over 99% of his fortune to charity and has worked with Bill Gates to create The Giving Pledge. This pledge asks billionaires to donate half of their wealth to charities. Although it’s difficult to quantify, much of Berkshire Hathaway’s success is likely due to positive public sentiment towards Buffett, as well as confidence in his investing abilities.
The Power of Google
Did you know that Google’s parent company is actually called Alphabet? Despite most people having never heard of them, Alphabet still brought in $19.5 billion in 2016, with a 20% increase in sales that blew away Wall Street’s predictions. Of course, Google is the main money-driver for this company. The cushion provided by the almost guaranteed success of Google allows this company to bet on many different investments, like biotech units and self-driving cars. Although these ventures are not always successes, they were still able to bring in quite a bit of cash for the company.
Alphabet prides itself on not being a conventional company and on taking risks in areas that might not make sense to outsiders. However, these “weird” investments have led to things like YouTube, Chrome, and Google Maps. Investors like that Alphabet seems to always be on the cutting edge of technology, leading to continued contributions from the company’s supporters.
Not all of us can be the next Steve Jobs or Warren Buffett. Still, whether we’re looking to start a new business or build up the one we currently have, we can still look to some of the tactics employed by these super successful companies.