Review
Brilliant. It's all here: the triumphs and disasters, the iron law of the business cycle and the timeless wisdom of those who've gone before him (Brent Hoberman, founder of lastminute.com )
Nine out of ten How-To books are a bore. This is the one out of ten. It's easy to read, with original ideas and useful advice for wannabe tycoons (Jeff Randall, Sky News presenter and Daily Telegraph columnist )
Independent, unorthodox, even bloody-minded - Johnson can be all of these and it's what makes him worth reading (Peter Bazalgette, Chairman, Endemol UK )
Luke Johnson knows a lot about an amazing range of business subjects and has thoughtful views about the controversial ones (Investors Chronicle )
Product Description
Luke Johnson is the man behind the growth of PizzaExpress and as a host of other leading brands; one of Britain's most successful entrepreneurs with an estimated personal fortune of £120 million.
In Start It Up he compresses two decades of success to reveal the realities of running your own business and bust some key myths along the way. Learn how to find the right idea or buy someone else's; source capital from all sorts of places you never expected; get the best from everyone you meet on the way - chiefly yourself; and stay sane while you do it.
Start It Up is that all-too-rare thing: a how-to book by someone who actually has.
From the Back Cover
Jeff Randall, Sky News presenter and Daily Telegraph columnist
Running your own business is nowhere near as tough as you might think. So what are you waiting for?
Luke Johnson is Britain's busiest tycoon, with a personal fortune estimated at £120 million. From PizzaExpress and Channel 4 to his incisive Financial Times Column, Johnson has spent two decades on the business frontline.
It Start It Up, Johnson sets out to inspire - and guide - every budding entrepreneur. He tackles the issues that really matter: finding the right idea, sourcing funds and getting the best from the people you meet on the way - chiefly yourself.
`Luke Johnson is independent, unorthodox, even bloody-minded - it's what makes him worth reading'
Peter Bazalgette, Chairman, Endemol
`It's all here: the triumphs the disasters, the iron law of the business cycle, and the timeless wisdom of those who've gone before him'
Brent Hoberman, founder of lastminute.com
`Very few people have had more impact than Luke Johnson'
About the Author
Excerpt. © Reprinted by permission. All rights reserved.
I spend a lot of my time studying business plans from entrepreneurs who are looking for investment. Many are impressive, but some are ghastly. Among the worst offensives:
- Aggressive confidentiality clauses and an over-obsession about non-disclosure agreements: I find this sort of pushing legal stuff very off-putting, especially for start-ups. Often you are expected to sign up to very rigid terms without even knowing anything about the proposition. In such circumstances I just turn the deal down flat. If the entrepreneurs distrust me that much they ought to seek backing elsewhere. Would-be restaurateurs are often the worst offenders - would I really bother stealing their idea?
- Overly technical documents: business plans should be written in layman's terms and avoid all jargon and endless acronyms. They should be readable and accessible, not obscure. Inventors can get too wrapped up in their subject - they forget that there are always thousands of projects seeking money. And promoters often use long-winded gobbledegook to disguise a fundamentally bad idea. If I can't understand the deal, then I don't get involved.
- Lack of focus: Plans that cover too much territory and companies that try to do too much at once don't appeal to me. Successful concepts are mostly simple, and successful entrepreneurs generally concentrate on a finite market and product range.
- Preposterous valuations: Obviously things that are far too expensive go straight in the bin. Such plans usually work back from a draft conclusion based on wild future projections, or spurious comparisons. Instead, valuations should be based on sensible estimates of what investors would actually pay. Of course this means you miss the odd Facebook, but I can live with that.
- Sketchy biographies: These should be honest and full. They are perhaps the single most important part of the entire proposal. I want to really know the owners and individuals who will make the thing happen. Vague or brief CVs make me suspicious. The chief executive and finance director's resumes are the ones that matter: big-name non-executive cannot compensate for weak executive management who are actually running the business.
- Weak numbers: This is really critical. The funding requirement, the estimated returns, and the cash flow projections - these must be attractive and sufficiently ambitious to be worthwhile. No one is going to put huge effort into a project that will never grow beyond one man and his dog. The figures should all be stated up front in an uncomplicated format. Do not bury them at the back of the pack. Everyone knows whatever you budget will be wrong, but a target to aim for is better than nothing. They key calculation is your cash break-even point; once you hit this revenue and cost combination, you know you can survive - then you can build.
- Ignorance of the competition: All capable entrepreneurs know their competition well. If they say they have none they are fooling themselves. A solid business plan has plenty of specifics about their rivals, and why their particular proposition has a genuine competitive advantage.
- Perfection: Every situation is flawed, and if you look for an opportunity with no drawbacks then you will never invest in anything. I quite like deals with a known problem, because then it can be address and the price can be adjusted to compensate.
- Huge appendices and too many spreadsheets: These might be necessary for loan applications, but equity investors tend to decide based on a few key points. All the supportive evidence and background material can be supplied later if the proposal is of real interest. Don't bury the hooks with the padding.
- Getting someone else to write it: It shows when advisors rather than principles author a plan - it lacks authenticity. By all means have experts critique your work but actually do the first draft yourself.
- Too much paper: Do not rely on the post, or present would-be backers with voluminous amounts of paper. Just get their email address and send them the core presentation online. Catch their attention early and it may lead to something.
- Unbelievable margins, profits and returns: Plans that suggest your company will quickly achieve operating margins of 35 per cent, returns on capital of 100 per cent and so on are not credible. Be realistic and conservative and you are more likely to be taken seriously.
Writing a compelling business plan is an art. It should give a venture the best possible chance of securing finance, and it is worth taking huge care over the task.
