FATHER OF THE FAST-FOOD
I just finished watching the movie Founder; based on the
story of Ray Kroc and the birth of McDonald’s. The movie was interesting in
many ways, and I took away a few insights relevant to our quest as property
investors.
Throughout the movie they referenced this quote from former
US President Calvin Coolidge:
“Nothing in this world can take the place of persistence.
Talent will not; nothing is more common than unsuccessful men with talent.
Genius will not; unrewarded genius is almost a proverb. Education will not: the
world is full of educated derelicts. Persistence and determination alone are
omnipotent. “
In many ways, Ray Kroc is the epitome of this quote.
He even wrote a book titled “Grinding It Out”, which spoke
of how, as a 52-year-old milkshake maker salesman, he saw something no one else
did, and had the faith and courage to turn a successful, family-run business
into a household name. McDonald’s is now in virtually every country, had
revenues of over $6B in 2016, and is said to feed 1% of the world’s population
every day.
So what exactly is persistence?
The dictionary defines it as the fact of continuing in an
opinion or course of action in spite of difficulty or opposition.
Persistence is no doubt an important quality for all
entrepreneurs and investors. The ability to stay the course in the face of
challenges may be a highly rewarding quality.
However, stubbornly holding onto your position in the face
of repeated failures could also prove counter-productive to your wealth
position. The challenge for all of us is how to know when persistence crosses
over into just plain stupidity.
There is quote often misattributed to Einstein: “Insanity is
doing the same thing over and over, yet expecting to get a different result.”
So how do we know the difference between persistence and insanity?
Ray Kroc was clearly no overnight success. He tried and
failed with a number of unsuccessful sales roles and business ventures. Yet at
52, he still had the passion and drive inside him to want more from his life.
So, whether you like the food, the business model, or even the man, there can
be no denying: persistence was a key factor in McDonald’s success.
So, on a scale of 1-10, how much persistence would you say
you have?
Do you pack up stumps the minute the going gets hard or
doesn’t go exactly to plan…or do you dig in and look for ways to overcome the
obstacles in front of you?
What business are you in?
Perhaps the turning point for Ray Kroc was meeting Harry
Sonneborn, whom Kroc referred to as his “financial wizard” and whom would go on
to become President of the McDonald’s corporation from 1955–1967. He heavily
influenced the decision to turn the business model from one about selling
burgers to being about controlling the real estate. And McDonald’s owns a lot
of real estate! In 2016, there were around 36,525 stores worldwide.
When it comes to investing in real estate, we see far too
many people treating it like a hobby, instead of the potentially lucrative
business it can be. We encourage all property investors to treat their property
investing like they would any other business.
No doubt you would agree that in any well-run business,
there are going to be structures and systems that help take the guess work out
of it. To be able to reproduce a consistent result — year after year — is
undoubtedly a powerful outcome for any business.
So as the CEO of your own property investment business, what
do your current systems look like?
Are you efficiently and effectively allocating the
appropriate amount of human, financial and emotional resources towards
improving your business year on year?
In the movie, the original McDonald brothers who actually
founded the business, Maurice and Richard, “failed” not because they did not
appreciate great system, but because they were afraid to want to grow their
business to the level it was ultimately capable of becoming. Their desire to
play it small was portrayed as a contributor to their business’s eventual
demise, some 6 years after Ray Kroc handed them a cheque for $3M.
As they say, in business you are either growing or you are
dying!
