Sam Walton Kept Rising No Matter What

Sam Walton felt sick to his stomach. He couldn’t believe he was getting screwed. He was just trying to earn an honest wage and build a small, little franchise business in New Port, Arkansas to support his young family. 

Five years into owning a Ben Franklin Five & Dime franchise, he grinded his way to $250,000 in revenue and $40,000 in profit per year. He was the most profitable and highest volume retail store in town and the most successful Ben Franklin Five & Dime franchise throughout the six-state region surrounding Arkansas.  

The success of the store was catching the attention of the town, including the landlord. Walton was so successful that the landlord would not renew his lease. Walton, as a young entrepreneur, made a small legal error. He did not include a clause to renew his lease after the first five years. 

The landlord would not renew the lease at any price knowing full well Walton had nowhere in town to move the franchise. The landlord wanted to give the successful franchise to his son on a silver platter. 

Walton found himself in a tough spot after the landlord purchased the franchise from him. Walton writes, “It was the low point of my business life. I felt sick to my stomach…done everything right – and now I was being kicked out of town.”  

Sam Walton had a young family with his wife Helen. It was a very stressful time. Helen shared, “I hated to leave. We had built a life there, and it was so disturbing to have to walk away from it.” 

But look at how Walton responded! 

Walton writes, “The whole thing was probably a blessing. I had a chance for a brand-new start and this time I knew what I was doing. Now, at the age of thirty-two, I was a full-fledged merchant; all I needed was a store.” 

Walton’s mindset is a rare one. Life happens FOR you, NOT to you. Instead of being a victim Walton chose to be a victor. 

Sam Walton took every dip and bump as a learning lesson. He COMPOUNDED every experience to master his craft of retail. He wound up finding his next Ben Franklin Five & Dime in the sleepy town of Bentonville, Arkansas. 

Walton’s mindset of learning and growing compounded for another 12 years. This time he grew his franchise and added multiple stores. And this time he never forgot to include a renewal clause in his leases! 

At the age of 44, he proposed a discount retailing concept to the executives of the Ben Franklin Five & Dime corporate HQ in Chicago. He offered to be the “guinea pig” and run a discount retailing operation as a proof of concept. The Ben Franklin executives laughed him out of the room for suggesting they cut their profits in half! 

Walton opened up a Walmart at the age of 44 in Bentonville, Arkansas with 15 years of 30% year over year sales growth. Walton highlights: “And like most other overnight successes, it was about twenty years in the making.” 

THAT is COMPOUNDING.

20 years of compounding knowledge, experiences, relationships, and industry intelligence. 

Walton’s career is non-linear. He had a lot of “NO’s”, a lot of hardships, and a lot of learning curves. Yet he also had a lot of upsides in his life, like his supportive wife Helen. He had an incredible mindset to allow experiences and relationships in retail to COMPOUND. 

Walton’s first boss from his first job at JC Penny could not believe his success: “It can’t be the same [Walton] I knew in Des Moines…that fellow couldn’t have amounted to anything.” 

Sam Walton just got after it. He put in the effort. “Action with a capital ‘A’” 

Let’s get after it this week. 

Onward, 

Matt