LEARNING FROM LORD SUGAR

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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.

The Greatest Comedy Sketch Ever

It's one of my great ambitions to with my sons recreate this brilliant comedy sketch which I've been lucky enough to see live but with Jimmy Casey, Roy Castle and Eli but not the creator Jimmy James.  So sit back and enjoy the unbelievable timing (even the cigarette smoking) of Jimmy James.

  

Book Review: Stripping for Freedom – by Leonora Soculitherz | THE SMALL BUSINESS BLOG

Book Review: Stripping for Freedom – by Leonora Soculitherz THE SMALL BUSINESS BLOG

Talk The Walk - If You Can't Beat 'Em ..... (Part One)

As the £1,4 billion Train to Gain scheme bit the dust. in the Spending Review, 75,000 newly funded apprenticeships were announced. There are four reasons why there have been no protests from companies about the loss of Train to Gain. Firstly, in the main the usual suspect larger employers received over 90% of this funding 2)Train to Gain funded training is training these usual suspects would have done anyway especially of training that was legally mandated 3) they've spent the money 4) the same usual suspect companies will expect to scoop the bulk of the 75,000 apprenticeships funding.

Whilst government could create rules that only fund apprenticeships for micro enterprises that are within their first eighteen months of trading (this is where the growth will come from) it is unlikely they will. So micro enterprise owners need to get cannier at looking and talking more like a usual suspect company in order to win government funded support and training. In this first of an occasional series we look at 'Talk the Walk' - speaking the right language.   


In order to get their fair share of government funded business and skills support small, micro enterprise owners and the self employed  need to learn the lingo of the corporates and senior civil servants. Simply memorise this easy to learn little ditty and you'll always have in your mind an impressive phrase to use when meeting government representatives. Wear a suit (men and women) and you're sure to become an attractive proposition for government funded business and skills support.

JUGGLING TOO MANY BALLS



It was the end of the day but I felt I was under the radar. I needed to make a paradigm shift so I pushed the needle. Out of the window of opportunity I thought I saw an elephant in a room shooting the puppy. I looped back and found the elephant before it swallowed the frog or screwed the pooch. Then I made sure I'd got all my ducks in a row. Just in time I remembered I was a vegetarian so it was case of just-add-water before feeding through the pipeline.


I knew I needed a better view so I chose to drill up on a strategic staircase and follow that with a spot of helicoptering. That was my opportunity for some blue sky thinking and on our way to touch base there was just time for some singing off the same hymn sheet before drilling down for an idea shower.

After my idea shower I got into bed with a prime mover and serious player. It was heads up, belly up, no navel gazing and sprinkle the magic. After sprinkling our magic we went bottom fishing for desk yeti. We then jumped the shark and wrong sided the demographic. Perhaps it was a case of juggling too many balls but after a brain detox we thought outside the box, picked low hanging fruit and at the end of the day could knife and fork it.


(please note: the wonderfully funny and useful guide to enterprise 'Stripping for Freedom' -available at amazon.co.uk - has a glossary explaining the meaning of each of these phrases but it's unlikely that the officials, managers and leaders that you meet, whilst being familiar with all of them, will know what any of them mean.)

The Small Business Policy Writer - After the Spending Review

If you think the senior civil servants that drafted George Osborne's Spending Review speech had a hard time, please spare a thought for the senior civil servant, in BIS, tonight who is writing some exciting new policies for small business to show that the government 'really, really' cares about them.  All of the new policies will need to be put together within a total cost of a £fiver .

Now, you might think a fiver isn't a lot to allocate to small business support, including start ups, but in fact it's not far off what small businesses have received for many years from government. The budgeting is modelled on a Treasury variation of Pareto, it's called the Fat-cat-o rule. It states that  95% of all government skills and support funding, including bale out money, must go to 'substantial employers' (code for fat cats) and civil service infrastructure to quality assure it (code for jobs for the boys), and up to 5% or a fiver (whichever is less) can go to 4.3 million other businesses in the UK.

So think of it that, theoretically,  £5.3 billion cuts in BIS will affect 30,000 bigger businesses. But only a little bit because they've already taken the money and run. It will still leave the fiver, that there was before, to help start ups and small business owners to survive and thrive. 

It does mean that the civil servant who is drafted in to write the new small business support policies won't fit with your picture of a drab, grey, middle aged man on £150,000 a year awaiting his millionaire's pension, yacht and retirement mansion, often but not always in  that order. No, this civil servant will be a creative sort - a fantasist. Ever since the election, and the inexorable rise of the dream party coalition, this person will have been locked up in a room in Ivory Tower or the dungeons at 1 Victoria Street, as far away as possible from the influence of real small business owners, until they come up with the goods. Their only two companions will be the complete works of JK Rowling and an inspiring photograph of a new, yet ridiculously rich, small business owner - usually Tony Blair.

Now you may say that you've heard government announcements from time to time like '£60 million invested into small firms training' . Ah, but in fact by the time they've set up the infrastructure, including quality assurance, and then brought in the contractors to deliver the training there's usually only - good, you're catching on - a fiver - left for the small business owner.

We asked our expert civil servant small business policy writer watcher what they thought we might expect in terms of small business support policy following the Spending Review  'Three things' said our anonymous expert 'and maybe a couple of others as padding which will never see the light of day. I expect the new initiatives to support small businesses to be derived from what are known in the policy writing trade as ESB, OAHBS and TURDV.


'Let me explain,' our anonymous expert continued, ' ESB – the Entrepreneurial Smart Box’, OAHBS (pronounced Oh, Ah, Bees) – the Open All Hours Business School and the TURDV (the V is silent) – Training U-like Response Discount Vouchers’.

The Minister will be able to announce that he is ‘delighted that these three 'joined up' initiatives can be delivered with a light touch but represent a step change in additionality.These initiatives are truly original and bear no relationship to what has worked in helping start ups and growing businesses in the past.'

'In fact,' he will continue, 'the ESB, Entrepreneurial Smart Box, was ‘trail-blazed’ in five regions with twelve entrepreneurs per region locked away in a top hotel/leisure resort for eight weeks. There the entrepreneurs could mix business with leisure and bounce ideas off each other. Their conversations were taped and fed back to them as they slept. This ‘learning from peers’ process was felt to be very successful and eight weeks deemed to be just long enough for a business to prove that it could survive without the presence of the Owner Manager. Indeed, nearly two-thirds of the businesses did survive.

The OAHBS – Open All Hours Business School has proven very popular with small business owners who need to relax after business hours with a drink. Top business schools at Cranfield, Durham, Warwick, Scarborough and Manchester now mix the ‘gin’ of management and leadership development with the ‘tonic’ of entrepreneurial ribaldry and retribution. An additional feature is the opportunity to visit other Business schools by train. Indeed, one entrepreneur rated the experience of six hours of buffet trolley hospitality between Scarborough and York as ‘staggering’.

Finally, TURDV – Training U-like Response Discount Vouchers allows the small business owner  to invest in technology and to maximise their use of it. So, for example, a business owner purchasing any Microsoft Office package will be given £50 in vouchers for training support by Microsoft for any other Microsoft software they purchase next.   A similar voucher scheme is likely to be used by banks for micro loans to start ups. So, instead of money the prospective entrepreneur will be given vouchers which will be redeemable against business planning advice from a bank adviser. Much more useful'


A lot to look forward to then, for a fiver,  from small business policy after the Spending Review.

CULLING FOR KINDNESS - MY ENTERPRISE SPENDING REVIEW

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As you know from my latest animated short movie 'A Sting In The Tail' http://www.youtube.com/soculitherz#p/a/u/0/13Ez-QHiEq0 the problem with government 'getting' enterprise is not really that much to do with public schoolboys and Oxbridge graduates that have never started and run an enterprise. It is much more to do with the role of their advisers, namely,  senior civil servants, top johnny consultants and glampreneurs.  If we rounded this lot up into the penthouse office suites of Ivory Tower or the dungeons of BIS at 1 Victoria Street and asked them questions about enterprise, and the skills and support required to do it, what would we find?

We'd find out that we have well meaning, very bright and highly qualified people with a pretty fair knowledge of the City, corporate management, leadership, 'walk the walk' jargon, professional occupations and traditional, functional vocations.  They will even have an inkling of what businesses that start up with lots of financial backing, staff and even large amounts of first year's revenue (e.g.Tony Blair's, alleged, £12 million consultancy biz) look like.  They will know what an independent retailer, an e-bay trader, a small private gym, a barber's shop, an independent cafe and a B&B  in Scarborough  (no - strike that) look like.

What most of these advisers to Ministers, like the Ministers themselves, are absolutely clueless on is what the 1 in 7 of the adult workforce, running their own enterprises, actually have to do in order to earn their living. They think there's something wrong with us, as small and home business owners, if we let on that the owner of most of the 400,000 start ups a year will earn less than £12,000 in the first year for themselves. They think there's something wrong  that as many start up their own business out of necessity rather than opportunity. They can't see that starting and running our own enterprise is in fact the top UK career option - for many of us it's even all  we can do.

They'll think there's something wrong that 90% of us work very long hours but have no intention of taking on more and in most cases, any, staff. They think  there's something wrong with our ambition that most of us will start and  continue working from home. They'll think there's something wrong that most of us prefer controlling our own destiny, by being our own boss, and prefer the online and offline community of others that do the same  We'd rather do that then joining a professional or sector body to  follow the best practice of the corporates.

Even glampreneur advisers to government don't always understand all of this. Enterquest published a survey of enterprise owners, this week, which showed that most thought that Dragons Den entrepreneurs, overall, were not helpful to small business).

Many of these government advisers say that most small business owners, like me, are 'Not strategic enough', 'Can't manage', 'Poor business plan', 'Banks would lend if they got half decent proposals', 'No idea on recruitment', motivation and people'. Indeed, they think there's something wrong when we say 'Selling your product or service', and getting the most hours each week doing this, is the most vital enterprise skill - 'can't others do that?'

There may be plenty wrong with us but none of the above. However, the growth in self employment and micro enterprises (don't like the 'word' - 'SMEs') over the last 20 years has truly, and proudly, made us the new working class of Britain and we are very different from these government advisers.

We are also where all the growth will come from, where the new jobs come from, where the innovation comes from, and where economic well being, communities and social cohesion will be built from.  We probably wouldn't even swap places with our 'higher ups'.

However, the government's enterprise support and learning policies will always be lost in translation until this yawning (still with us?) gap of understanding is closed between government advisers and enterprise owners.

For policies to work, and most importantly to be implemented in a way that works (everyone will say its working if they're receiving funding to do it - even if it's the daftest thing you ever saw). these advisers must understand what attitudes, skills and know how are really needed to start and run your own self employed, micro or small enterprise. 

Government and their advisers must also understand who is trusted by us, as small business owners, to help us gain the appropriate support, skills and know how to succeed (other small business owners and accountants usually come out top).

The stakes are high. With the right support, skills and know-how over 85% of all start ups will still be trading in 3 years time and 6% will become substantial businesses.

We have £millions of research and tens of thousands of small business owners each year providing testimony as to what is required and who should provide it. This evidence includes what pre start and start up support is essential and what must be available to all. It includes what the banks must do, what  the colleges and universities must do, what the enterprise support communities must do and to how enterprise networks like Ecademy, Institute of Enterprise and Entrepreneurs and others can be enabled to do more.

The sting in the tail is that I don't see any likelihood of these advisers wanting to get their hands dirty by really finding out - certainly not to the point of understanding and empathy.

Therefore, my recommendation is that the Spending Review should announce that there will be no government department responsible for business support, innovation and skills. There will be no BIS.

I realise this means lots of job losses in BIS and in the consultancies they contract with but I know we'll help them all as start ups and ultimately they may be poorer but they'll be a damned sight happier and more interesting.. This solution means no more government funded business support or skills interventions. It means no more government support for any size of private sector organisation. So it will mean no more bale outs to the fat cats, no more trade missions,  no more Business Links or local replacements for these, no more colleges and universities funded to provide management, leadership or entrepreneurship courses and no government funded start up support and training.

I think enterprise (self employed, micro and small and home business owners) can do it for themselves and make the UK the best place to start and run your own enterprise. We'll even mentor the unemployed wanting to become self employed - free of charge, initially. Naturally we'll set up enterprises to do all of this and most people will pay for quality enterprise support and training - but surely that's better? 

It's the government intervention, without understanding, that is no longer affordable and is holding enterprise back..   

Stripping For Freedom

Stripping For Freedom