The worlds richest man, Carlos Slim gives advice to budding entrepreneurs to find as many sales people as possible.
Going back to your experience in the insurance business, you said that if you insure one automobile, it's like gambling, high risk. But if you insure 100,000 automobiles, you spread your risk and it's a much better business. But you have to start with that first automobile. How do you build a business like that, from the first to the 100,000th automobile?
Carlos Slim: Well, you can begin with one. Let's suppose that you're talking about a very new insurance company.
Carlos Slim: First, you begin creating your organization with a team of salesmen, not with one. You need to create many hundreds of salesmen to go to the market to offer the product. What you can do, maybe, if you are going to begin, is to find which area the casualties are lower, the risks are lower, because there are less stolen cars and accidents, and you can begin in this place. You will begin selling one maybe at 11 o'clock, but at 5 o'clock, maybe you've sold 100, and 200 next day, and 600 and 1,000, and as much as you go there, you're taking a statistical risk.
That's true. But as entrepreneurs just starting a business, if they don't have access to capital, they can't hire a hundred salesmen to create that scale quickly. How would you counsel them to get started?
Carlos Slim: Well, an insurance company is regulated, and you need to have a license. If you don't have the minimum capital, they don't give you a license. Maybe you can begin by selling insurance if you love the business, like an insurance salesman. If he loves the business, he can begin selling insurance and to invite people to work with him to make a team of salesmen and grow in this way. If he has a big portfolio and he wants to start an insurance company, maybe he can look at a partnership or apply for a license. But he needs to capitalize first, or he won't get the license for an insurance company. You wouldn't buy insurance from a company without capital.
Going back to your experience in the insurance business, you said that if you insure one automobile, it's like gambling, high risk. But if you insure 100,000 automobiles, you spread your risk and it's a much better business. But you have to start with that first automobile. How do you build a business like that, from the first to the 100,000th automobile?
Carlos Slim: Well, you can begin with one. Let's suppose that you're talking about a very new insurance company.
Carlos Slim: First, you begin creating your organization with a team of salesmen, not with one. You need to create many hundreds of salesmen to go to the market to offer the product. What you can do, maybe, if you are going to begin, is to find which area the casualties are lower, the risks are lower, because there are less stolen cars and accidents, and you can begin in this place. You will begin selling one maybe at 11 o'clock, but at 5 o'clock, maybe you've sold 100, and 200 next day, and 600 and 1,000, and as much as you go there, you're taking a statistical risk.
That's true. But as entrepreneurs just starting a business, if they don't have access to capital, they can't hire a hundred salesmen to create that scale quickly. How would you counsel them to get started?
Carlos Slim: Well, an insurance company is regulated, and you need to have a license. If you don't have the minimum capital, they don't give you a license. Maybe you can begin by selling insurance if you love the business, like an insurance salesman. If he loves the business, he can begin selling insurance and to invite people to work with him to make a team of salesmen and grow in this way. If he has a big portfolio and he wants to start an insurance company, maybe he can look at a partnership or apply for a license. But he needs to capitalize first, or he won't get the license for an insurance company. You wouldn't buy insurance from a company without capital.
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