At the core of many businesses is the relatively straightforward concept of “trading”. In simple terms you buy an item for a certain price and then sell it for a higher price.
A slightly more complex version is where you buy individual components, get them assembled into a new item and then sell the newly constructed item for a higher amount than the sum of the individual parts.
I’ve just finished reading the autobiography of Alan Sugar, or Lord Alan Sugar to give him his full title.
It’s an excellent and inspirational read.
For any of you outside of the UK that haven’t heard of Lord Sugar he’s a “rags to riches person” who through a combination of hard work and good ideas created various very successful business empires. He’s also the star of the hit TV show “The Apprentice”.
I personally feel that Lord Sugar is a role model for business men and women around the world and people can learn a lot from him.
At the other end of the spectrum though is Mr Guo from Wuhan in China.
Unlike Lord Sugar, Mr Guo showed a complete lack of ethics, research and business acumen. Following the terrible tragedy of the recent earthquake and tsunami in Japan, Mr Guo decided to purchase 6.5 tonnes of salt.
His purchase decision was made on the basis of rumours that were spreading in China that the iodine in salt would help prevent any radiation sickness from the disaster at the Fukushima nuclear plant. He was expecting the price of salt to increase so arranged for 3 truckloads of salt to be delivered to his apartment in the expectation of selling it at a high price to people that were desperate to avoid radiation sickness.
Alas for Mr Guo the Chinese authorities announced that Chinese residents would not be affected by any radiation from Japan and the salt wouldn’t help.
The end result was that salt prices didn’t increase.
It gets worse for Mr Guo though.
Apart from the salt prices stabilising, he has been told that it will be illegal for him to sell the salt as he doesn’t have a receipt for the purchase.
The end result is that the unsuccessful trader is currently sat in his apartment accompanied by 6.5 tonnes of salt.
Perhaps Mr Guo should buy a copy of Lord Sugar’s book?
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