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How I Built Nike: Phil Knight’s 4 Business Lessons for Young Entrepreneurs

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Phil Knight
Image Credit: Phil Knight

Everybody knows what Nike is, but not so many know how it was built or who built it. Phil Knight, the once-young entrepreneur who left his lucrative accounting job to pursue his dream of having his own shoe company is the man behind Nike. I was lucky enough to read Knight`s autobiography “Shoe Dog,” and today I’m going to share the top business lessons that I believe every entrepreneur should follow to succeed.

Here are 4 business lessons I learned from Phil Knight:

1. Mix what you like with what the market needs

I recently watched an interview between multimillionaire Tom Bilyeu and the internet celebrity, and former monk, Jay Shetty and I caught this quote, “the entrepreneurial success is to ask: What are you good at, what do you like, what the market needs and how to make money off it.” All the big guys in the business world – Jobs, Buffet, Gates…etc, have used the same principle time and time again, and when I read Shoe Dog, I saw that he did the same thing.

Knight was good at running,  wanted to be an entrepreneur, and saw a gap in the market. America needed better running shoes so he went to Japan, made a deal with one of their top shoe companies and became their West-coast distributor. Problems later emerged but he had already known his calling and his Oregon-based company “Blue Ribbon” became the one we now call “Nike.”

“Don’t tell people how to do things, tell them what to do and let them surprise you with their results.” – Phil Knight

2. Team up with better people

One of the smartest moves Knight made in his life was teaming up with his coach, Bill Bowerman. Who better to approach about selling running shoes than your well-known track coach who has ties to every shoe store in Portland?

Also, Bowerman wasn`t just a good track instructor, he was also a great businessman with a great personality. He was an alpha leader, a great networker and above all, Bowerman had a thing for running shoes. He used to sneak into his players` lockers, steal their footwear and hand them back with some minor modifications that made them run better and faster.

Bowerman`s skills had bigger demand later on when both Blue Ribbon and Onitsuka Tiger drifted apart. Now that he and Knight had to manufacture their shoes, it was Bowerman`s technique of molding rubber soles with a waffle iron that they used for making the first generation of Nike shoes, and America loved it.

3. Have a 100% conviction you’ll win

Passion and conviction are the salt and pepper of every successful business. Without a firm belief in your ideas, you won’t be able to sell them to both customers and investors.

The first question Knight received when pitching the CEO of the Japanese shoe manufacturer Onitsuka Tiger was, “Mr. Knight, what company are you with?” A difficult question to answer especially when you don’t have a company and still live with your parents. But Knight had a conviction that America needed better running shoes.

Knight had seen it before when the Japanese cameras invaded the markets back home, and he knew people would do the same with imported running shoes. Due to this, his entire pitch was all about passion and possibility which was enough to sign the partnership papers with them.

“Dream audaciously, have the courage to fail forward, act with urgency.” – Phil Knight

4. Don’t sell…show

When he was young, Knight tried selling encyclopedias door-to-door and failed miserably. He saw no need for selling them, they were heavy to carry, and because it felt like a burden to Knight, nobody bought from him.

Years later, he had to repeat the same cycle but this time with shoes. Blue Ribbon was still not conspicuous, and he had to meet with every store owner in the Pacific Northwest to get them to try his new shoes. Again, everyone Knight met said the same thing: “The world doesn’t need another track shoe.”

He had to find another way. Phil Knight came up with a new idea, instead of pitching his shoes, he attended as many track meets and races as possible and asked the runners, coaches, and fans to wear them and see if his shoes were better than their Adidas shoes; the market’s number 1 brand at the time. And guess what? They loved it and all of a sudden, Knight was all booked.

Successful people understand that you must love what you sell – or at least believe it has value. The more passion you have the better your sales numbers will be. Now that you’ve read Phil Knight`s top lessons, I want you to leave a comment with the number-1 lesson you’ve learned in business either from books or, preferably, from your experience. It`ll be more than interesting hearing from you.

Which one of these business lessons will you begin incorporating? Let us know which one and why in the comments below!

Marwan Jamal is a fitness and health blogger at healthline.com. He’s a great fan of the gym and a healthy diet. He follows the trends in fitness, gym, and healthy life and loves to share his knowledge through useful and informative articles.

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Entrepreneurs

How Entrepreneurs Are Harnessing LLCs to Launch Successful Startups

LLCs have unique advantages for starting up and growing a successful business

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why you should set up an LLC

In my entrepreneurial journey, I’ve learned that LLCs have unique advantages for starting up and growing a successful business. But, before delving into the advantages, it’s essential to grasp the fundamentals of what an LLC is and how it operates. 

What is an LLC?

An LLC is a hybrid business entity that combines the liability protection of a corporation with the pass-through taxation of a partnership or sole proprietorship. This unique blend provides entrepreneurs with the best of both worlds: personal asset protection and simplified taxation.

One of the most significant advantages of an LLC is its limited liability feature. This means that as the owner, my personal assets are shielded from any liabilities or debts incurred by the business.

In the event of lawsuits or financial obligations, only the assets of the LLC are at risk, offering me peace of mind and protecting my personal wealth.

Advantages of Forming an LLC

Flexibility in Management and Structure

Another aspect of the LLC that appealed to me was its flexibility in management and structure. Unlike corporations, which have rigid hierarchies and formalities, LLCs allow for a more relaxed approach to governance. As the founder, I have the freedom to structure the company in a way that suits the needs and goals of my startup.

For instance, LLCs can choose to be managed by their members (owners) or appoint a manager to oversee operations. This flexibility enables me to maintain full control of the business or delegate management responsibilities to trusted individuals while retaining ownership.

Additionally, LLCs are not bound by strict meeting requirements or extensive record-keeping obligations, reducing administrative burdens and allowing me to focus on building and growing the business.

Pass-Through Taxation and Financial Efficiency

One of the most attractive features of an LLC, particularly for startups, is its pass-through taxation. Unlike corporations, which are subject to double taxation (taxation at both the corporate and individual levels), LLCs pass profits and losses directly to their members’ personal tax returns.

This tax efficiency not only simplifies the filing process but also allows for greater flexibility in managing cash flow and reinvesting profits back into the business. As an entrepreneur, minimizing tax liabilities and maximizing financial efficiency are critical components of long-term success, and the pass-through taxation feature of an LLC aligns perfectly with these objectives.

Enhanced Credibility and Professionalism

Establishing an LLC can also enhance the credibility and professionalism of a startup. Unlike sole proprietorships or general partnerships, which may be perceived as informal or less legitimate, an LLC provides a formal business structure that instills confidence in customers, investors, and partners.

By operating under the umbrella of an LLC, I can present my startup as a reputable and established entity, which can open doors to opportunities such as securing financing, attracting top talent, and forging strategic partnerships.

This enhanced credibility can be a significant advantage, particularly in competitive industries or when seeking to differentiate my startup in the market.

Protection of Intellectual Property and Brand Assets

For startups built around innovative ideas or unique intellectual property, protecting these assets is paramount. An LLC offers an additional layer of protection for intellectual property and brand assets, safeguarding them from infringement or unauthorized use.

By registering trademarks, copyrights, or patents under the name of the LLC, I can establish legal ownership and enforce my rights more effectively in the event of disputes or infringement claims. This protection not only preserves the value of my intellectual property but also enhances the overall stability and longevity of the startup.

Steps to Form an LLC

Let us now look at the general steps to form an LLC for your business:

Step 1: Choose a Name for Your LLC

Selecting a unique and distinguishable name is the first step in forming an LLC. Ensure that the name you choose complies with the rules set by your state’s LLC division. Typically, the name must end with “Limited Liability Company,” “LLC,” or an abbreviation of these terms.

Additionally, the name should not infringe on the trademarks of existing businesses.

Step 2: Designate a Registered Agent

A registered agent is an individual or entity appointed to receive legal documents, such as lawsuits or subpoenas, on behalf of the LLC. The registered agent must have a physical address within the state where the LLC is formed.

For instance, if you are forming an LLC in Texas, ensure that your registered agent has a physical address in Texas.

This role is crucial for ensuring that the LLC remains compliant with legal requirements and maintains good standing.

Step 3: File Articles of Organization

The Articles of Organization, also known as a Certificate of Formation or Certificate of Organization in some states, is a document that formally establishes the LLC. You’ll need to submit this document to the appropriate state agency, usually the Secretary of State or Division of Corporations.

The articles typically include basic information such as the LLC’s name, address, registered agent details, and the purpose of the business.

Step 4: Create an Operating Agreement

While not always a legal requirement, drafting an operating agreement is highly recommended for LLCs. This document outlines the ownership structure, management roles, voting rights, profit-sharing arrangements, and other important aspects of the LLC’s operations.

Even if you’re the sole owner of the LLC, having an operating agreement in place can help clarify expectations and prevent disputes in the future.

Step 5: Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your LLC for tax purposes.

Even if your LLC doesn’t have employees, obtaining an EIN is necessary for opening a business bank account, filing taxes, and conducting other financial transactions.

Step 6: Obtain Necessary Permits and Licenses

Depending on the nature of your business and its location, you may need to obtain various permits, licenses, or certifications to operate legally. These requirements can vary widely from one industry and jurisdiction to another. Common examples include business licenses, zoning permits, health permits, and professional licenses.

In my entrepreneurial journey, the decision to establish my startups as LLCs has been instrumental in mitigating risks, optimizing financial performance, and positioning my ventures for long-term success.

By harnessing the advantages of the LLC structure, I’ve been able to navigate the complexities of entrepreneurship with confidence and resilience, laying the groundwork for a bright and prosperous future.

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Entrepreneurs

Build a Strong IT Team with These Smart Hiring Tips

Without dedicated IT staff, your company may not be able to function as efficiently or effectively

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Hiring tips for tech industry

The role of IT staff in your company is not only essential but also ever-evolving. As your business grows, so does the need for qualified IT staff and more robust recruiting solutions.

After all, from maintaining and troubleshooting the computer systems that keep your business running smoothly, IT staff also help employees stay connected and productive by providing technical support at all times. (more…)

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Entrepreneurs

5 Important Legal Tips Every Entrepreneur Should Know

With a firm commitment to legal knowledge, you pave the way to grow your business sustainably

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legal tips for entrepreneurs

Embarking on the entrepreneurial path is a courageous venture that calls for a diverse skill set to achieve enduring success.

While creativity, drive, and strategic vision are paramount, integrating legal insight into your entrepreneurial toolkit can be a game-changer.

This comprehensive guide delves deeper into the five critical steps that can empower you to navigate the intricate legal landscape and propel your venture toward prosperity. (more…)

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Entrepreneurs

6 Hacks to Boost Your Productivity as a Business Owner

To improve how much you get done each day, it’s smart to establish routines and use careful planning

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productivity for business owners

Entrepreneurs are always looking for ways to get more done with the time and resources they have. Business owners can use clever productivity tricks to break these limits and make the most of their projects. (more…)

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