His humble beginnings started at a council flat on an East London Estate. All his wealth came from entrepreneurship. By following good and effective business methods, he grew from being an 11-year-old boy living in a poor council flat to become one of the richest people in the UK.
He started Amstrad in 1968 and grew the business into one of the biggest computer and telecommunications companies in the country.
Sugar became Sir Alan Sugar in 2000 and later, Lord Sugar in 2009. He is also involved in a number of philanthropist activities with a number of charities.
He had a rather average spell at premier league football side, Tottenham Hotspurs. He bought into the club in 1991, but his involvement did not bring any real success except the league cup won in 1999.
His time at Spurs was full of disagreements with the fans and later described his time at Tottenham as “a waste of my life”.
So how did he become so rich?
Allan Sugar started buying and selling from a very young age. According to an article published by the BBC, Alan Sugar`s earnings from his business dealings, after school and at weekends, were far outstripping those of his father, Nathan, who worked in a tailoring sweatshop. In 1968, at the age of 21, he started his company, Amstrad.
Sugar had spotted an opportunity on the market for turntable covers. He noted that customers wanted a product that could help protect their turntables from gathering dust.
He also observed the products that were already on the market and found that he could make the product at a much lower cost than existing manufacturers.
Lord Sugar discovered a way of producing the turntable covers from plastic instead of the more expensive material, Perspex, which was being used by existing producers.
He, therefore, invested £2800 of his own money into an injection molding machine and began making the cover through a process called injection molding. The process involved squirting powdered plastic into a custom-made metal mold which then transformed the powder into tainted plastic covers.
This process had low unit costs and so the business was able to offer the product at a much lower price than those being offered by competitors.
The fact that Sugar was able to make his product at a much lower cost gave him an immeasurable competitive advantage. That meant that he could charge lower prices for his product than his competition could.
Hence, as a result, the cheaper turntable plinths and covers from Amstrad flew off store shelves like hotcakes.
Once the plinths and covers business had gained traction, Amstrad added low-cost, low-quality amplifiers and tuners, to its sales catalog.
The business continued with its systematic expansion model and by the 1980s, the company had established a formidable brand known for selling low-priced, Hi-fi and TV technologies.
The business catalog of sales now included in-car entertainment systems, amplifiers, clock radios, tower systems, and televisions.
In 1980, the company was listed on the stock exchange and turned Lord Sugar into a multi-millionaire. But he was not going to stop there. Oh no! At this stage, he had become unstoppable and was no longer just satisfied with business success and profit.
He now wanted to revolutionize the computer world. After extensive research and consultations, in 1984, Amstrad began selling their own home computer, the Amstrad CPC range.
Amstrad further expanded into communications and purchased a number of telecommunications companies. The company also established itself as the principal supplier of set-up boxes to the UK`s major satellite TV provider, Sky. Lord Sugar eventually sold Amstrad to BSkyB for $125million in 2007.
So How Can You Emulate Lord Sugar`s Success?
If you are aspiring to become a successful entrepreneur, you simply must develop a habit of looking and finding opportunities to exploit. You have to look at what customers are buying and why they are buying those products.
Look at the successful businesses and see what they are doing for their customers and how they are doing it. You cannot live in a box and hope to be successful. You have to explore things from different perspectives.
One of the crucial perspectives that successful business owners have used to model their businesses is that of customers. What do customers think about your products? Learn to see things the way customers see things. This knowledge will help you to develop better solutions to their problems.
There will never be a greater opportunity for business than the satisfaction of customer needs. No matter where you go or who you ask, business is all about customer needs and their satisfaction. Those who succeed are those who satisfy the customer`s needs in the most cost-effective way.
The Ultimate Business Success Model is, therefore, one that provides;
The full satisfaction of customer needs at the lowest price possible
Amstrad mastered this concept and their whole success story is centered on this model. Lord Sugar identified that there was a customer need and did something about it. Off course, everybody knew that and there already was a product satisfying that need on the market.
However, the manufacturers that were on the market at that time were ignoring the second element of the ultimate model for business;
“Giving the customer the lowest price”
Lord Sugar mastered the concept of giving low prices to his customer. That was, still is, and always will be the absolute winning business formula.
Everything else that Lord Sugar did after discovering this ultimate business model became a success. He knew he could look at any product and re-design it at a lower cost and be a success. Be it computers, TVs, or Hi-Fis, the model still brought success.
Whatever else you do in your business always try to give your customers what they need at the lowest price. I don’t care what else you have heard about business but let me tell you this and never ever forget it;
”Customers will always respond favorably to low prices”
The most important thing for you to do if you are looking to replicate the success of Amstrad to your own business is for you to start combing for business opportunities that you can exploit.
Never rest and never tire from looking for chances to get your business to the top. Let me assure you that, the day you stop looking for, and identifying opportunities to improve your business, is the day someone else will discover the opportunity that will get you out of business.
The business world is cutthroat. It`s a dog eat dog arena. Therefore you have to be constantly looking to give yourself an edge over your rivals and the best way to do that is to find a way to offer lower prices to your customers.