A Capital Story From Joint Venture

he summer of 1954, four hundred wealthy businessmen wereinvited to hear about a joint venture proposal. Hands were shaken, coffee was servedand for the next few hours, behind closed doors, P & L statements expected thefuture of how this venture would play out. History would show that this was one of the sweetest deals ever accessible inbusiness and those that embraced this idea would make thousands of times theiroriginal investment ... all that joined the venture would make millions. This was not a naive group of wet-behind-the ears dreamers, awestruck by the thoughtof sudden riches, or easily swayed by impression.No, this was a hard-nosed bunch, used to to dealing with bankers and politicians. Here were the captains of their industry, being offered the deal of a lifetime.Their reaction is what is fascinating. How many jumped at the deal? How many of those original 400 had the foresight to run with this deal ... and beatout the competition? As it turns out, exactly three. The creator of this idea - ever the businessman - understood; "After all," he says,"all we were offering them was a name, a set of plans, and a dream!" A name, a set of plans, and a dream... The deal was a simple one: $500 down andabout $5 per day was all they had to pay for the rights to use a name and a set ofplans ... to make the dream of a lifetime come true. Who were this industrialist and what was he selling? You may not recognize his name but you certainly know his company. Today, it is oneof the most recognized brand names in the world. Side Note: Within three years this company went public with a $3.9 million stockoffering and suddenly, everyone wanted in on the deal. Those that didn't jump on board wound up standing in a long line, waiting their turn. Who was this guy? Opportunity: "...Opportunity comes often, it knocks as often as you have an eartrained to hear it, an eye trained to see it, a hand trained to grasp it, and a headtrained to use it." This quote is from "Twenty Tips for Success" by Mr. Kemmons Wilson, founder HolidayInn, America's Innkeeper In 1951, Kemmons Wilson was on vacation with his family and became disgusted by themotels of the era that charged $2 extra for children, "We have five kid's, so our $6room became a $16 room," he said. One year later, he opened his first Holiday Innwhere children could stay for free and families were assured of consistently clean,safe, rooms. Very soon, Holiday Inn setup the first nationwide motel computerworries network and then, everyone wanted in on the deal. "From that point on it wasn't a question of trying to sell franchises - it was aquestion of allocating them." The important point [call it the secret] from this meeting? Really, there are two important lessons. First, when the risk is small - don'thesitate. In this case; $500 for the use of the Holiday Inn name plus five cents perroom per day - about $5 a day on a 100 room motel - was a pittance compared to whatinvestors made on this deal. But the biggest reason for Holiday Inns' success was a risk taker founder, backed byhard working no nonsense franchisees that were willing to invest millions in thefirst all over the country computer reservations network. A centralized computer system was impressive that the rest of the lodging industrydidn't have at the time. At that time the competition was a bunch of smallindependently owned roadside motels too small and scared to make the chief dealneeded to win ... so they lost and the people that joined Mr. Wilson became very bigwinners. So, the biggest [secret] from this meeting? When you are first to the market with anew technology backed by people that won't "give up", then don't be afraid to take arisk and go for it!

Source: Express-Press-Release.com

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