Ten things you learn when you make – and then lose – millions of pounds

Del Boy knew the value of hard graft
Del Boy knew the value of hard graft Credit: BBC

Over the course of my 40-something years, I have made and lost several fortunes.

Sometimes it’s been my fault, sometimes it’s been no-one’s fault and sometimes I’ve been left railing against the iniquity of it all. Regardless, the end result is always the same: you go back to square one, dust yourself off and start again. You hope that only the good bit of history will repeat itself, but deep down you know that your personal boom and bust cycle is probably as entrenched as that of the UK economy.

"Don’t just earn money for its own sake or obsessively build empires that ruin the rest of your life"
Alex Proud

Even so, I’d say my experience has been pretty positive overall. If it wasn’t I’d retrain as an accountant or get a job at Unilever. I love starting businesses, I love creating jobs and careers and, great big lefty that I am, I don’t even mind paying tax.

I can say all these things with a smile on my face because, at the moment, it’s all going pretty well for me. I’m in period of - dare I say it - almost boring stability and growth.  So, without further ado, here are the ten lessons I’ve learned from going from rags to riches and back again several times. Feel free to remind me of any of these next time the creditors are beating a path to my door.
 

1. Don’t Believe the Hype

“A brilliant tactician, a visionary risk taker, a strategic mastermind...”

Rubbish.

These are all euphemisms for “I didn’t have a clue, I was flying by the seat of my pants, and, that roll of the dice I made, well, it came up sixes”.

There is a tendency to describe business decisions as brilliant in hindsight when, in fact, they were just lucky. No-one can foresee the future and chance plays a huge role in your success. You’re probably neither brilliant nor stupid. Work hard, build a business and take a few punts.

In real life as in computer games, it's best to shoot rather than shy away
In real life as in computer games, it's best to shoot rather than shy away Credit: NHL 13

The one piece of advice that is true here is Wayne Gretzky’s “You miss 100pc of the shots you don't take.” You need to take the shots. If you’re lucky, some of them will pay off.
 

2. Money Doesn’t Make you Happy

Hardly news, I know. But many people miss this and so don’t enjoy their success.

In 2010, the Princeton Economist, Angus Deaton and the psychologist Daniel Kahneman produced a study that said, on average, Americans got happier for each extra dollar they earned up to $75,000 a year. After that, their happiness levelled off.

Walter White's suffers under the weight of his ill-gained riches
Walter White's suffers under the weight of his ill-gained riches Credit: Breaking Bad

Obviously, there’s a bit of “your mileage may vary” here. $75k is a fair chunk of change if you live alone in Ohio, less so if you have a family of five in New York. But the point is sound. Don’t just earn money for its own sake or obsessively build empires that ruin the rest of your life. Get to a place where you earn a bit more than enough, then calm down, take your foot off the pedal and spend more time with your family and friends.

If you’re one of those Type-As who can’t stop, consider social enterprise, charity or helping the local community. All these things will make you happier. Being worth £35m rather than £28m will not.
 

3. Treat Everyone Well

Again, a dispatch from the front line of the obvious. But, as we already know, luck has been partially responsible for your elevation, and luck can turn. For God’s sake, treat people well on the way up, because you’ll see them again on the way down.

First time round, I didn’t do this and it’s something I genuinely regret, not least because it’s really horrible having crowds cheering as you climb the steps to the financial guillotine. So, don’t fall out with people, resolve any disputes you can and try to do the right thing.

Here, it’s a good idea to employ a really outspoken PA. My No.2, Holly will always tell me when I’m behaving like a d*** – and I value this.
 

4. Nothing Fails like Failure

The flip side of “nothing succeeds like success”. When it all goes wrong, it goes wrong very fast, often shockingly so. Failure can run through your business like a bushfire. So don’t ignore small failures. When they happen, create a firebreak. If they start to spread anyway, consider all your options and be radical.

Once the board turns red, you might be best to cut your losses
Once the board turns red, you might be best to cut your losses Credit: AFP

Don’t be afraid to ask for help – your suppliers would far rather give you a debt holiday than see you go bankrupt and lose most of what they’re owed. If things get really bad, get advice from a lawyer or insolvency advisor. They’ll help you make the right decisions. By this I mean decisions that won’t leave you with legal issues ten years down the line.

Act sooner rather than later – the quickest way to run out of options is to do nothing.
 

5. Think American

The American attitude to success is: “If at first you don’t succeed, then try, try again”. The British attitude, to invoke a line from The Simpsons, is: “You tried and you failed – the lesson is never try”.

Scrooge McDuck sees the light
Scrooge McDuck sees the light Credit: DuckTales

Seriously, the British view of business failure stinks – and it’s why we’re a nation of high-end money launderers and lawyers rather than a nation of value-creating entrepreneurs. If I could take one thing from America, it would be their respect for people who’ve tried to build businesses.
 

6. Life Goes On

Let’s say it goes bad. Really bad. You have to confront the demons of bankruptcy or a CVA (Company Voluntary Agreement). The thing is it’s still not that bad: demons are a lot less frightening in the light. Your friends and family will still be there. The sun will still rise, you won’t have cancer and you’ll still be in a better position than 95pc of the world’s population. Now go for a ten mile walk, and get a bit of perspective before sitting down and planning how you’re going to start again, using what you’ve learned.
 

7. Ignore the Abuse – but Acknowledge What You’ve Done

People will come out and slate you. Slaters gonna slate and haters gonna hate. This is related to no.5 - you committed the cardinal British sin of being a success and so now we must gloat over your downfall.

It might not be a bad idea to delete all your social media accounts and you really should try not to read the vicious stuff. But equally, you should communicate with decent people. Your bankruptcy or debt write-offs will cost people money – and you need to hold your hands up and say sorry. Make it clear to smaller suppliers that, if you can make it up to them later, you will.

Businessman Martin Shkreli increased the price of an Aids-related drug before being arrested on fraud charges 
Businessman Martin Shkreli increased the price of an Aids-related drug before being arrested on fraud charges  Credit: Getty

All this will help your self-esteem. It’s cathartic and an important part of learning from your mistakes.

 

8. Don’t Flash Your Cash

Again, related to being nice when the sun is shining. Bingeing on stuff when you’re flush won’t make you happy.

However there are things that money can buy that do make you happy. One is new experiences. So if you’re feeling wealthy, why not go jungle trekking in Costa Rica or walking in the Himalayas instead of buying another Range Rover?

Be generous to others too, but be careful about being overly generous to family and friends as they can often resent it. Instead give money to charity or work for good causes.

Oh, and as much as it pains to admit it, getting rid of the Aston Martin DB9 was a good thing to do. So good I might have to buy a new one and do it again.
 

9. Save For a Rainy Day

This is something I’m really, really bad at. I think all entrepreneurs are bad at it. It’s in our nature. When we’re coining it in, hand over fist, our first thought is how brilliant it all is and how it can only get better. Our next thought is how we should expand. Our last thought is that four years ago we were looking for change down the back of the sofa so that we could buy a pint of milk.

At the very least, try and drop loads of money down the back of the sofa when times are good.

 

10. Know Thyself

The traits that make small businessmen and entrepreneurs great are often their greatest weaknesses. So take risks, create new things, borrow money to build and so on but recognise that your triumphs often contain the seeds of failure.

Try and remember this when the orders are rolling in, investors are chucking money at you and you’ve just decided that you need not one but two new houses. Look in the mirror and tell yourself it could all come crashing down tomorrow. 

Believe me, it could.

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