THE well known entrepreneur and author came to the Idler Academy last night to give advice to forty students on the art of business. He mentioned numerous anecdotes from his long career in business which started, he said, at the age of 18. As a medical student at Oxford he organised parties and then went on to put on big raves at warehouses in London. At one such event the sprinklers went off and Luke ran two miles to a phone box to call the fire brigade. When they arrived they refused to enter the building until Luke had handed over £500.
He went on to raise the money to buy Pizza Express even though he had an overdraft at the time. Over the next six years he grew this business from 12 restaurants to over 250 and sold his share in 1999.
Luke is on a mission to help more people escape the drudgery of corporate life and start their own businesses. He firmly believes that it is better to be one’s own master than to be stuck in a boring job – even if the boring job pays well.
Luke called Google a “parasite” that sucks money out of existing media businesses by taking advertising revenue. “People are frightened of them so they don’t say that. But I don’t care.”
He said that the UK now is a great place to start a business. The crowd-funding trend has made it easier than ever to raise money. Investors are keen to get involved in small business at a time when interest rates are low and the stock market is unexciting. In addition the Internet has made it easier to try out ideas at home and without huge cost.
Small businesses are growing in number. The number of self-employed people now outnumbers the number of people who work for the government, and that is a significant moment. He sees a future where the big companies will decline – he cited Tesco – and small ones will rise.
Asked about future trends, Luke said he is keen on artisanal baking. “That’s because I have invested in Gail’s Artisan Bakery chain.”
What every entrepreneur needs:
1. Optimism. Luke said that entrepreneurs are by nature optimistic people. They would like to grow the size of the cake rather than argue about how to share the cake out.
2. A partner. Luke says he has always worked with partners. The ideal combination would be a risk-taking maverick and a more cautious financial mind.
3. Willingness to fail. Luke discussed his big failure which was to buy the bookshop chain Borders. He says this was an emotional purchase and he’d underestimated the growing power of Amazon, the supermarkets and other retailer who were selling books at huge discounts. Nevertheless he says that entrepreneurs generally have many failures and this goes with the territory.
4. A sense of fun. During his talk Luke often mentioned the word “fun”. He clearly actively enjoys the process.
5. Patience. Good businesses can take five or ten years to become successful. The idea of an overnight success is a myth or at best very, very rare, even in the tech world.
6. An open mind. He said that complacency must be avoided. There is always room for improvement and you must listen to customers and staff and make small changes every day.
7. Knowledge. Too many entrepreneurs start businesses in areas they know nothing about. If you want to start a restaurant, he said, then work in one for a year.
8. Luck. Luke has recently reentered the Bingo business. A month after he did so, the government reduced Bingo Hall tax by 5%.
9. Willingness to copy. Many successful businesses look at what someone else is doing and do it better.
10. An excess of self-confidence. This is a must but be should be tempered by a more sensible partner.
Luke Johnson is the author of Start It Up: Why Running Your Own Business is Easier Than you Think (Penguin)