Thursday, January 20, 2011


Learning from Lord Sugar

First Impressions

Lord Sugar reminds me of my Dad, although my Dad, sadly, never got close to being Lord Sugar’s age. My Dad also started and ran his own very successful business.

My Dad, like Lord Sugar, came from a poor background, had a basic education and thought that most people, who didn’t know him well, regarded him as a bit ‘rough and gruff’. However, his family, many very loyal, longstanding friends, his staff, customers and suppliers really enjoyed his humour and company. Some of you may be surprised but I think this is an apt description of Lord Sugar too. There are differences, though, as my Dad sold wooden rather than electronic products, was from Yorkshire, taller, fair haired, a Methodist and was never on the telly. Otherwise, they’re very similar.

A Large Dollop of Common Sense 

It’s probably not a very fashionable thing to say that I’ve learned a lot from Lord Sugar but I think the things I have learned are worth sharing for other prospective and existing small and home business owners. Many of the things I’ve learned from him seem like just common sense but that’s the problem with our enterprise world there are a lot of theorists, gurus, business professionals, public servants and educationalists that haven’t got the ‘Enterprise T Shirt’ and try to over complicate what we do, day to day. They do it, at our expense, to boost their own earnings.

What I get from Lord Sugar is a large dollop of common sense. Being reminded of the business basics in his articles (all fees for which he gives to charity) and interviews is very useful to me and my business. Reminding people of the bare enterprise essentials in a humorous way is also why I wrote ‘Stripping for Freedom’ and why we founded SFEDI, as we realised that everyone who risks their own time and money to start their own business deserves to get the learning and support in these essential enterprise skills. Over the last few years, I’ve got braver in saying; particularly to women friends, that I admire Lord Sugar. This is because I’ve had some chats with Tim Campbell, the first ‘The Apprentice’ winner.

Whatever Tim Says

Tim, as well as being another hero of mine, is the founder of the fabulous Bright Ideas Trust (BIT) which helps 16-30 year olds in London who just wouldn’t be able to start a business without BIT’s money and mentoring. If you’re in London, do volunteer to help them.

Tim worked with Lord Sugar for two years. He admires him and thinks his advice is spot on too. So, if Tim, the coolest guy in the world, rates Lord Sugar, and what he has to say, then I can come out and say it too.

Before I’m sued, let me clear up another couple of things. If Lord Sugar reads this he may well say he doesn’t know me (‘never heard of the bloke’) and he may also say he’s never said the things which I’ve learned from him.

The Spurs and Amstrad days

Well, back in the day, when he was signing Jurgen Klinsmann for Spurs, he rang me in our little offices, in our small business that we’d started up eight years previously. This was the year before we founded SFEDI. As requested, I then went to see him at Amstrad HQ at Brentwood and then we tried to help him, unsuccessfully on my part, to ‘direct sell’ a particular product through recruiting self-employed distributors.

Although I only met him a few more times in the few months that Amstrad was a client of ours, I did, through his loyal and highly motivated Directors and team learn something of how he operates. I found him funny, personable and a good communicator with absolutely everyone – no airs and graces, no management ‘bullshit’, direct but fair. Since then I’ve read and listened to much of what he says. The following is purely my interpretation and is how he’s influenced me in starting and running my small businesses. I hope some of it helps you to start or run your own business too.

1. Distrustful isn’t a bad place to start

Especially at pre-start, start up and during the first eighteen months of starting your business you’ll find companies, including banks and government agencies, trying to sell you things you just don’t need - particularly expensive toys or protection to make you look like a ‘successful, professional business’. Don’t believe them. Far better to ask what you may need of people you can trust implicitly- friends and family that have started and run their own businesses. Money and time will be tight and the wrong purchase could be the difference between survival and failure. Every available bit of money and time needs to help you with winning customers in the early months.

Frankly, I’ve been ripped off too many times in the twenty five years I’ve run my own businesses, although to be fair, never by other small business owners. There will always be people trying to get something for nothing out of you – government folk are good at that too. However, I can safely say that it would have been far worse if I hadn’t observed Lord Sugar’s default position which I think is ‘you’ll need to convince me, sunshine’ - distrustful until I know you and even then we’ll stick to exactly what we’ve agreed.

I’ve also been very lucky to have Clare Francis as co-owner and co-director of our businesses, because she’s not as naive as me, indeed most women enterprise owner friends just seem ‘to get on with it’ in a more straightforward way than their male counterparts. Ruth Lowbridge, SFEDI Chair and co-owner, Sarah Anderson CBE and Rachel Elnaugh are other role model entrepreneurs, for me, in business nous.

2. You’re on your own; you can’t rely on anyone to support you.

This is another default position, which I attribute to Lord Sugar that I now adopt. My take on it is that the world’s biggest companies, including banks, will be bailed out by governments and vice versa. However, neither government nor the bank nor your big company supplier will bail you and your small or home business out. This is fact. If you’re losing money you’ll find out immediately that you’re absolutely on your own so it’s best to start and run your business on that basis right now.

Even when you do have security and/or a future order book that a bank will give you an overdraft or a loan from, you’ll find money is an expensive cost, one which your business will not be able to afford in the medium and long term. The classic mistake is paying out the same salary bill in the hard times and hoping a bank or government facility will cover it until business picks up – they won’t help you – they are professional gamblers trying to pick winners.

3. Stick to everything you agree and meet all your commitments.

Successful small and home business owners are the healthiest people in the world. Why? Because we work harder and longer hours than any other group of workers but hardly ever have a day’s sickness absence. This is because we can’t afford to be sick and we know the importance of meeting every commitment we make.

Lord Sugar is renowned for meeting all his commitments. He also pays suppliers as he’s agreed so that he builds credit terms and trust with them. A good business reputation of doing what you say you’ll do is where reliable business relationships, referrals and recommendations come from. These things are priceless.

4. Repeat business is the best business.

All successful small business owners, in my experience, are time poor. They frankly can’t afford the time in meetings and KITs (Keep in Touch sessions) that corporate managers do day to day. To small business owners, travel and meetings keep you away from the real work you need to do to survive and thrive. Another reason for being time poor is that we have to be, or maybe we like to be, all-rounders. I think this is a good thing as we’re involved in all parts of the business and know our products, services and market backwards.

Lord Sugar admits this comes at a price as he doesn’t regard himself as a good delegator. Conversely, I’ve not met a really successful business owner that doesn’t take main responsibility for all of: production (product or service), delivery, suppliers, personnel, customer service and the most important of the lot of them - marketing and sales.

In my view, not Lord Sugar’s I’m sure, the reason many highly trained corporate managers, professionals and graduates make lousy small and home business owners is they can’t, or won’t, go and win the orders. All successful entrepreneurs I’ve met do most of the selling and make all the major deals , That’s why they know that it saves them lots of precious marketing and selling time and usually makes for healthy margins if they can, through excellent customer service, even extra incentives or benefits, persuade existing customers to repeat buy.

5. You know best how to run your own business.

One of the biggest fallacies and frauds, in terms of money being given to big companies and trade bodies by governments, which I’ve tried hard to expose is that we can all learn a lot about how to start and run businesses from the fat cats and their cronies. Large company corporate CEOs, directors, functional leading lights (e.g. HR, Marketing, Brand, Quality, ‘Ethics’), management consultants, management & business studies academics, other professional educators and government advisers aren’t very useful to us. . Small business owners usually cannot learn anything from them because these people just don’t get what you need to do to succeed in your own enterprise.

In fact, because time is more precious to us, there are many things, on average, that business owners do better than corporate or institutional managers – looking after our customers and our staff, for example. So be very careful about time you spend at seminars and events. Only join networks, online and offline, with people that you can genuinely learn from.

Lord Sugar is more outrageous about this and would say something like ‘don’t waste your time and money listening to bullshit – the only people that make any money out of these events are the organisers’.

6. All you need is paper and a pencil and a lot of hard work.

I hope I’ve saved the best and most provocative heading until last. Remember Lord Sugar is no technophobe – he understands ICT and probably likes gadgets too. When I first met him he’d just bought Viglen so he also knows the benefits to business of technology. .

The most important lesson I’ve learned from Lord Sugar, my Dad and my co-owner’s father , who all started and developed very successful businesses is that starting and running your own enterprise is not a complex process.  As well as really hard work, a fantastic knowledge of our product and/or service and the market, in order to succeed in our own businesses we must always go back to the basics. That’s good news and is why enterprise is for all and why privilege or higher education are not necessary for your earnings potential as they are for many other career options.

The essential skills will always be the same - just don’t make it complex. You do not need a 30 page business plan – you just need to work out where you’re aiming for and how you might get there and what that means in terms of how you spend your time and money. 90% of start-up plans are likely to be seen as works of fiction within six months. We never really know until we start trading and it’s best to not spend too long planning. Get working, get selling as soon as possible and start earning a living!

It’s more important to find out what will sell and for you to gain the know how to sell it at pre start. We know that with the right support at start up, and some test trading, 85% of new starts will still be trading in 3 years’ time and 6% will go on to be substantial businesses. We’ll never know in advance which the 6% are – otherwise everyone would be falling over themselves to buy a piece of their action – but the reason we formed SFEDI is to do our very best to ensure that there is the right help around to give everyone a good start.

Someone who has started and run their own business can provide invaluable help to you – if they haven’t then beware. There’s something really wrong if you need complex software or finance professionals to tell you how you’re doing. Every successful business owner I know manages cash flow constantly and can write down a very good estimate of all their costs and how much they need to sell in order to cover these costs.

Finally ... loving it

I love Lord Sugar’s story, hope I get this right, that in the early days of his business he’d try to sell all he needed to by Wednesday to cover all the week’s costs so that all the margin from sales on a Thursday and Friday went straight to assets.

Winning and keeping customers, making deals, seeking out opportunities, innovating, developing your brand for credibility, managing cash flow – these are always the basics and how you work at them will make or break your own business . They’ll always be the same bare essentials for success if you want to be your own boss - which is why I wrote ‘Stripping for Freedom’, helped to found and run SFEDI and value what I’ve learned from Lord Sugar.

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