|Legal Name:||Best Buy Co., Inc.|
|Headquarters Regions:||Richfield, Minnesota, USA|
|Founded Date:||22 August 1966|
|Founders:||Richard M. Schulze, James Wheeler|
|Number of Employees:||125000+|
|Area served:||United States of America and world|
|Products of Company:||multinational consumer electronics retailer|
|Net Worth in 2022:||$45 Billion|
In life, our dreams are always different and we tend to have different views about everything in life including what we want to become in future. Another very important thing that we tend to focus on the person we want to share the rest of our life with and many other decisions. At the beginning, things seem to be so fair and we tend to appreciate every simple thing life brings our way.
However, as time goes by, we realize that what we are getting from our paycheck is not enough to cater for all our needs. Depending on the position your employee gives you, it also proves quite impossible to be as creative as you would want to. Therefore, the only option you are left with as an individual is to start your own business.
Running a business is not easy and so is starting one. It therefore takes a strong will and commitment to venture into any business. For Richard M. Schulze and James Wheeler, they were ready to pay any cost just to see the success of their business. The founding of Best Buy was born from the love Richard M. and James Wheeler had for electronics.
The company started as an electronics store located in St. Paul, Minnesota and was initially known as Sound of Music. Sound of Music specialized in high fidelity stereos. Schulze used his personal savings to start his first store and took a mortgage on his family’s home to start the second store.
Well, how well do you know about Best Buy? If not much, here is what we know about Best Buy to date.
On 22nd August 1966, Richard M. Schulze started a business by the name Sound of Music with his business partner. As the company grew, the company managed to acquire Bergo Company and Kencraft Hi-Fi Company. In their first year of business, Sound of Music managed to earn a total of $1 million in revenue while their profits was estimated to be roughly $58,000.
In 1969, the company had three store and Schulze bought out of his business partner. By 1978, the company operated nine stores throughout Minnesota. Their Roseville, Minnesota store was the largest at the time as well as the most profitable. But unfortunately, in 1981, it was hit by a tornado. The showroom was destroyed and the roof sheared off but luckily, the storeroom was left intact.
To ensure he didn’t incur a total loss, Schulze decided to have what he called a “Tornado Sale” of the excess and damaged stock in the parking lot of the damaged stores. The remaining of the marketing budget was spent in advertising the sale and he promised “best buys” on everything. During the four-day sale, Sound of Music made more money than they ever did in a typical month.
In 1983, he had $10 million in annual sales and a total of 7 stores and after the sale, he decided to rename the company to Best Buy Company, Inc. He also expanded the product offerings and included VCRs and other home appliances with an intention of expanding beyond his then-core customer base from 15 to 18-year old males. Their first superstore was opened in the same year in Burnsville, Minnesota.
The superstore was a high-volume, low-price featured business model which was partially borrowed from his successful Tornado sale in 1981. In its first-year of operation, the Burnsville Store out-performed all the other stores combined. In 1985, the company was taken public and in 1987, it appeared on New York Stock Exchange market for the first time.
In 1988 the company was in a price store with one of its stores that was based in Detroit and Richard thought of sell it for $30 million to Circuit City. Circuit City however rejected this offer and they promised to open their own shop in Minneapolis and outdo them.
There was no stopping for Best Buy and every year marked a better chance for them. In 1992, they hit the $1 billion mark in annual revenues which was a great achievement in less than a decade. They debuted “Concept III” business model after the debut of “Concept II” in 1989. They also went to several other new markets in 1994 which included Washington, D.C and Los Angeles.
Just as you would expect, Concept III was much larger than Concept II and it also involved other expanded products which included “Answer Center” touchscreen kiosks. The touchscreen kiosks would display production information for the employees as well as the customers. It also had demonstration areas for products like video games and surround sound stereo system.
Although Best Buy has been named in some controversies severally, he always seems to find a quick solution to the problem. One of the controversies was their accusation of contributing to unethical deforestation. As a result, they came up with a campaign dubbed “Greener Together” which was meant to reduce customer waste through proper disposal and recyclable packaging as well as increasing the energy efficiency of their products. As a result, they were listed among the top 50 largest green power purchasers by the U.S. Environmental Protection Agency.
Net Worth & Earnings of Best Buy in 2022
Over the years, Best Buy has been able to employ 125000 employees. As of 2022, Its annual revenue is approximately $45 billion with operating revenue of over $1.90 billion.
Looking at how successful Best Buy has become and all the challenges Richard has been able to overcome over the years, we can say that he is a true entrepreneur.