Benjamin Franklin’s Five Guiding Principles Every Businessperson Must Know

From Colonial America to Modern Business: A Living Legacy

A self-made businessman, Benjamin Franklin had a fertile mind. He turned it to science, philosophy, mathematics, farming, and almost every other topic. Among the most celebrated of America’s Founding Fathers, he was hard-working and knowledgeable. A shrewd politician, ambassador, and diplomat, he knew when to speak and when to be silent. By the time of the American Revolution, he was an elder statesman. His curiosity knew no bounds.

He’s still regarded as one of the greatest American writers. Thomas Jefferson, a master of the written word, drafted the Declaration of Independence. He sought Franklin’s help editing it, showing his trust in Franklin’s compositional skill. Prodigious in output, Franklin published material under his name and various pseudonyms. He created characters and used them to express truisms, often relating to money, labour, business, credit and debt.

Charlie Munger, Warren Buffett’s vice-chairman, advisor, and close friend, drew guidance from the words of the American Revolutionaries and luminaries like Einstein, Darwin, and Da Vinci. But according to Buffett, “Charlie’s favorite […] is Benjamin Franklin.” Through the strands of time and the printed word, Franklin’s views on trade helped bring Berkshire Hathaway to great wealth. Munger published Poor Charlie’s Almanack, a combination of speeches, essays and experiences. The title was inspired by Franklin’s famous Poor Richard’s Almanack. Both works combine genius, insight and common sense. Poor Charlie’s Almanack is worth reading.

Charlie Munger and Benjamin Franklin: modern and historical advocates for prudent commerce and ethical business principles.

But this piece discusses who Franklin was, his principles, and why they’re still important. There are few enduring certainties in business, but Franklin produced them. For those reasons and others, his words are as valuable today as they were in colonial America. They’ll remain valuable for as long as humans do business.

The Biography of a Self-Made Man

Early Life and Lessons

Born in Boston in 1706, Franklin had two years of formal schooling. His father was a candlemaker who’d emigrated to Boston from Northamptonshire, and his mother was from Nantucket. She passed her excellent judgement and levelheadedness on to the young Franklin. At 6, Benjamin’s parents gave him money for a local fair. He paid too much for a whistle, which he enjoyed. When he told his brothers and sisters how much he’d paid, they laughed at him. His mother soothed the young Benjamin but advised him that he could have had money left over for another toy if he’d been more discerning. “Whenever you really want a thing,” said his mother, “ask yourself first of all: how much will [it] cost?” The lesson stuck. Whenever Franklin had a fierce desire for some object, he’d temper it by asking himself if the loss of self-control would be worth the object’s price.

At around this time, he learned to read. Later, he had two years of formal schooling, typical for the ‘middling’ class (middle class) into which he was born. Afterwards, aged 12, he apprenticed as a printer under his brother James. He spent all his free time reading and writing essays and prose. “Prose writing,” Franklin wrote in his Autobiography, became “of great use to me in the course of my life, and was a principal means of my advancement.” As a teenager, he went to Philadelphia. He enjoyed Pennsylvania, where Quakers comprised a large part of the population. Their quiet reflection, open-mindedness and forbearance impressed Franklin. They promoted works for the public good, education, and democracy, and Franklin soon did the same.

From Apprentice to Master Printer

He published more prose in Philadelphia and continued working in the printing trade. By 1723, he was a master printer, an achievement that gave him great pride. In 1724, he travelled to London, where he worked at printing houses near Lincoln’s Inn Fields. He spent several years there, then returned to Philadelphia. In 1727, at 21 years old, Franklin formed the Junto, a reading society and a club for mutual improvement. Junto members discussed morals, politics, and natural philosophy. The Junto evolved into the Library Company of Philadelphia, America’s first subscription library. Franklin believed access to books would help ordinary citizens better themselves, as books had done for him.

After Franklin advocated for paper currency, Pennsylvania adopted its use. Franklin printed Pennsylvania’s official paper currency. Not long after, he became the official printer for paper money in several other northeastern colonies. He headed postal systems in several colonies. After the Revolutionary War, he was appointed as the United States’ first Postmaster General. The earliest American stamps bear his image.

Benjamin Franklin on the first US postage stamp, symbolising his foundational role in American communication and commerce.

Newspapers and Growing Influence

He continued to prosper when he started printing newspapers. His first, The Pennsylvania Gazette, was widely read throughout colonial America. He wasn’t interested in using newspapers to make money, although they helped. Instead, he used them to instruct colonialists in various fields. Good writing was a skill in great demand at the time. Commerce relied on the written word. Printed materials were a way to promote social, civic and political discourse. In taverns and other public places, people affixed newspapers or read them aloud to others. Eventually, he’d print more than two dozen newspapers. Using the proceeds, Franklin purchased properties in the northeastern colonies.

1732, Franklin published the first Poor Richard’s Almanack, which he distributed annually until 1759. The eponymous character is a pious, quiet rural man whose homespun remarks have become proverbs. For instance:

“Early to bed, and early to rise, makes a man healthy, wealthy and wise.”

“Eat to live and not live to eat.”

“There are no pains without gains.”

He condensed these comments into another publication, The Way to Wealth, published in 1758.

Title page of Franklin’s Way to Wealth, an 1814 edition illustrating the enduring appeal of Franklin’s financial wisdom.

Advancing Science and Business

He continued to write inquiries on topics from the construction of chimneys to provisions against famine in China. He conducted scientific experiments. Flying a kite during a thunderstorm, he proved lightning was electricity. He invented the lightning rod, improving city safety. He designed a stove which better heated homes while using less wood. A problem-solver, he was as systematic of mind as he was creative.

The Philosopher and His Kite, an engraving depicting Benjamin Franklin’s famous kite experiment on electricity. This scene has become a lasting image associated with his scientific contributions. (Source: Library of Congress.)

His systematic approach extended to business innovation. In 1752, Franklin established The Philadelphia Contributionship, America’s first property insurance company. Still operating today, it introduced key principles of modern insurance: property inspection, risk-based rates and financial reserves for claims.

The Path to Revolution

Franklin’s business success and scientific and intellectual reputation led to public service. Franklin became an invaluable contributor to the Patriot’s cause. Britain’s taxation of stamps affected Franklin’s businesses. He returned to London, where he spoke in front of the House of Commons and was instrumental in repealing the stamp tax.

In this 1921 painting, Benjamin Franklin (seated at left), John Adams (seated centre), and Thomas Jefferson (standing at right) are depicted editing the draft Declaration of Independence in 1776. (Source: Library of Congress.)

As the Patriots’ desire for independence grew, Franklin defended American interests in his newspapers. Several colonies appointed him as their representative to the British Crown. The British came to view him as an agitator. He returned to Pennsylvania and helped fuel colonialist anger against the British.

Join, or Die, a 1754 political cartoon published by Benjamin Franklin in The Pennsylvania Gazette. It urged colonial unity and became iconic in the American Revolution. The colonies are depicted as a segmented snake, which would die if they remained separate, but live if they united. It is one of the most recognisable symbols of the era’s struggle for independence.

The war broke out in 1775. The following year, Pennsylvania’s assembly elected him as that colony’s representative to the First Continental Congress. At the Congress, he moderated disputes between the northern and southern colonies.

The Final Years of a Polymath

The French were proud of their influence on American revolutionary thought. It came through the writings of Rousseau, Voltaire, and Montesquieu. Franklin, chosen as the American emissary to France, became as famous in France as he was in America. Already celebrated for his writing, printing, and scientific work, Franklin charmed the French people and their monarch.

Had he not lived, the American colonies would have been denied the force of his personality, his persuasiveness and his artful use of humour and jocularity. He’d have never been able to convince, as he did, the French and other European powers to support the American Revolution. Without French aid, it’s hard to see how the Continental Army could have defeated the British Empire, the most powerful in history.

The grave of Benjamin Franklin in Philadelphia, commemorated with a plaque celebrating his philanthropy, patriotism, and his talent.

The Americans achieved independence in 1783. Seven years later, at the age of 84, Franklin died in Philadelphia. Twenty thousand people attended his funeral. The French National Assembly declared a period of mourning. He had outlived most of the other Founding Fathers of his generation.

Benjamin Franklin’s life experiences made him sagacious. He was a continuous learner. His lessons on business come directly from those learnings and experiences.

Practising What He Preached: Commerce, Trade and Insurance

An advocate of hard work, Franklin favoured business, having started as a small businessman himself. He was in favour of acquiring wealth (“light purse, heavy heart”) but warned against excess (“in success be moderate”). Patient industry, he said, was the best way to earn money. Franklin advised against speculation and scheming.

Because he wrote so much, and because so much of what he wrote was helpful, it is impossible to include or prioritise his writings on insurance, interest, money, risk, credit, debt and business within an article of this type. But it is sensible to survey some of his words, and to interpret them where needed. Even a few of his observations will benefit anyone currently engaged in commercial activity.

Benjamin Franklin’s views on credit were prescient. Many of Franklin’s quotes appear to frown on borrowing, but he didn’t oppose credit. Instead, he tried to inspire people to use credit prudently. He used it himself.

Franklin would have used trade credit insurance had it existed in his time. It would have appealed to his pragmatism since it so effectively manages risk.

Franklin’s insurance company, The Philadelphia Contributionship developed insurance techniques new to the colonies. At first, it only insured against fire damage. Later, Franklin and the other members formed a subsidiary that extended insurance to all property damage. Interest grew the firm’s capital pool. The company marked, with signs or with paint, those houses which it insured. The Contributionship showed Franklin’s grasp of sustainable business practices. By protecting homes and businesses, it helped promote growth in the city. Meetings between members furthered that aim.

The Philadelphia Contributionship building, established by Benjamin Franklin in 1752 as America’s first mutual insurance company. The company insured against fire damage and later, property damage of all kinds.

Many ideas he used to run his insurance company underpin modern trade credit insurance. If trade credit insurance had existed in colonial America, he’d have used it. It would have helped the type of productive industry Franklin supported, promoted and conducted. It enables productive industry today.

Benjamin Franklin built lasting enterprises. His insurance company still operates, proving he understood risk and commerce at their foundations. He was no theorist. He practised what he preached.

Five maxims follow. They show Ben Franklin’s views on business during his time. All are pertinent today.

Five of Benjamin Franklin’s Business Maxims and Guiding Principles for Businesspeople

(1)  “Remember that credit is money”.

From The Way to Wealth.

Franklin recognised that credit is a form of wealth and requires careful management. When properly used, credit multiplies business opportunities. Today, when businesses extend credit to customers, they create commercial opportunities while assuming risk. His practical mind would have seen trade credit insurance as a natural evolution of his insurance company and of the other credit tools he used in colonial America.

 (2) “For want of a nail the shoe was lost; for want a horse the rider was lost; for want of the rider the battle was lost.”

From The Way to Wealth.

In this quote, Franklin describes a chain of consequences. It is a proverb that Franklin popularised, although variations exist in writings centuries earlier. “A little neglect”, Franklin believed, “may breed great mischief”. The horse-nail proverb has plenty of applications for modern businesses but is chiefly concerned with risk and risk management. Trade credit insurance is the nail. The ‘lost battle’ is a business which has entered administration and the expensive, time-consuming attempts to chase creditors. A trade credit insurance policy will supersede the need for the battle, by compensating for losses. It is a crucial instrument for protecting businesses today, with businesses increasingly interconnected and insolvencies frequent.

(3)   “An investment in knowledge pays the best interest.”

From Poor Richard’s Almanack.

Understanding one’s trading partners was vital in Franklin’s time when enterprise was local and a good reputation indispensable. It remains vital now, as trade spans continents and many suppliers never meet their customers. The maxim alludes to risk, and its management. Knowledge is a risk management method. Every business should know as much as possible about customers’ past histories, practices and financial health. Such knowledge protects against losses. Whether gathered through internal research or via trade credit insurance brokers, it is the type of information that guides sound business decisions.

(4)   “Buy what you have no need of, and eventually you will sell what is necessary to you.”

From Poor Richard’s Almanack.

Discerning between what you need and what may only seem useful is a theme Franklin refers to often. Where a buyer purchases items because they are on sale, rather than because the buyer needs those items, Franklin offers this caution: “Perhaps the cheapness is apparent only, and not real. The bargain may do more harm than good. You call them goods, but if you do not take care, they will become evils.”

(5)   “Whatever is begun in anger, ends in shame.”

From The Way to Wealth.

Here, Franklin cautions against making decisions in anger. Elsewhere, he warns against making decisions born of any strong emotion. Emotional decisions drive hasty actions. It can be hard to extricate emotions from the decision-making process, but it is possible. Franklin advises (as he told himself in his youth) to take time before making any decision, especially a business decision. Reflection and calm assessment is best. Passionate decisions often break relationships. Income can be disrupted, deliveries delayed, and a host of similar consequences, few good, arise. Professionalism entails many traits, but calmness is one of the best.

Benjamin Franklin’s Ageless Wisdom

Benjamin Franklin’s commercial insights transcend time. They rest on unchanging truths about human nature and business relationships. His maxims guide modern leaders as they guided colonial merchants. They teach caution without timidity and ambition without recklessness. Franklin understood that business success requires both practical tools and sound judgment. Modern businesses may have more sophisticated tools than those available in the 18th century. But using them well still demands wisdom.

The Philadelphia Contributionship’s modern logo, reflecting the company’s centuries of commitment to risk management and community safety.

Franklin’s influence flows through centuries, from colonial America to modern boardrooms. It has shaped minds like Munger’s and Buffett’s. Yet his writings speak to every businessperson today. The adages quoted here, and the thousands of others he produced, carry the same force and practical value as when he first shared them over 250 years ago.