Discussions of Entrepreneurship

Case In Point: Sam Walton, America’s Entrepreneur

In 1945, with $5,000 of personal funds and $20,000 borrowed from his father-in-law, Sam Walton, perhaps the world’s most successful businessman, became an entrepreneur and opened his first retail store. Later, as a franchisee with the Ben Franklin variety stores, Walton and his brother started buying up other variety stores. They began experimenting with “discounting” in certain departments in their stores. By 1960 they owned and operated some fifteen stores with total sales of $1.4 million.

In 1962, using a loan against his personal assets, he opened his first “free-standing” Wal-Mart discount store in Rogers, Arkansas. Wal-Mart has since then maintained a singular focus on providing the lowest prices to its customers. Eight years later, with 30 stores, Wal-Mart went public (initial public offering) and raised $4.6 million that was needed to fuel Sam’s ambitious dreams. Some thirty years later a single share from that IPO would be worth 2,048 shares; a total value of $116,736, or a total return of 707,300% on the initial investment.

By 1979 the number of stores reached 276 and Wal-Mart reached $1.25 billion in sales. It became the nation’s number one retailer in 1990. In 1997 it was the largest employer in the US with 680,00 employees and had sales of $105 billion. Wal-Mart was ranked #1 on the Fortune 500 listing in 2002 and had its biggest single day sales in history on the day after Thanksgiving that year: $1.43 billion.

By 2003, with nearly $245 billion in sales, Wal-Mart was the world’s largest retailer with nearly 4,700 stores and was growing 12.3% year over year. Sam Walton’s story is about triumph over adversity and long, hard times. He got his retail start in 1940 as a salesman and management trainee at J.C. Penney. At the time of his death in 1992 he had a personal net worth of nearly $25 billion.