I loved this list. One of the United Kingdom’s most successful entrepreneurs, Luke Johnson, shares 21 lessons he’s learned in business:

1. The world is in love with the romance of start-ups. But all other things being equal, I believe it can sometimes be better to buy a business than start one.

2. Never demand a certainty: if you wait for that, you will be on the sidelines for ever.

3. Leave behind the notion of the big idea and just do what most successful entrepreneurs do: copy and improve. Imitate first, and then devote yourself to constant incremental improvement.

4. Whenever you can, make sure a name has some underlying meaning. Don’t copy the example of Diageo; one of the world’s biggest drinks manufacturers. “Diageo” means nothing. It’s not even easy to spell, or to Google. For everything that’s bad about high-concept names, look no further than Diageo’s own toe-curling explanation: “The word Diageo comes from the Latin for day (dia) and the Greek for world (geo). We take this to mean every day, everywhere, people celebrate with our brands.” I wonder if Diageo’s management realize that having to listen to that sort of rot could well make its staff want to quit and start their own business.

5. Today is a better time to start a business than tomorrow, no matter how today looks.

6. Achievement changes people. Once someone attains status and wealth, their attitude towards sharing the spoils and the glory alters. It slowly dawns on them that actually all the clever moves and breakthroughs were their idea and, in fact, they are the only one who really does any work.

7. When I interview managers, I ask them about their customers and competitors. The high achievers will know them intimately, and can talk for hours about the strengths and weaknesses of their rivals.

8. I tend to respect actual experience in a line of work, or a specific trade qualification, over an MBA.

9. It can be better to take a bad decision and correct it later than procrastinate and sit on the fence.

10. Anyone who employs talented people knows that talent is a rare commodity. The entrepreneur should move heaven and earth to hire it. Yet at the same time, no company should ever be in thrall to its stars.

11. Football clubs are essentially charities run for the financial benefit of staff, as are most investment banks.

12. It’s a sad fact that if an entrepreneur employs enough people, sooner or later there will be a thief on the payroll.

13. The most common personal issue I’ve encountered among associates has been the male mid-life crisis, with the classic accoutrements: mistress, motorbike, drugs, long hair, and even cosmetic surgery.

14. The very utterance of the letters HR should strike fear into the heart of every self-respecting entrepreneur. Human resources are like many parts of modern firms: they are a pure expense and a burden on the backs of the productive workers.

15. The life of a self-made man is not always pleasant. Driving hard bargains, dealing with litigation, juggling creditors, making staff redundant, fighting for customers – these are all part of the craft of running your own show. Managing a business can have a brutalizing influence on your character.

16. Hugely successful entrepreneurs probably don’t make for tranquil life companions as a rule.

17. The greatest ritual of all is, of course, the “meeting”. This is a magnificent engine of bullshit of all kinds. It gives the participants the feeling they are making progress with their project, whatever it may be.

18. It soon becomes apparent that some angel networks are run by people with no obvious record of great success themselves. 19. Robert Frost put it best: “A bank is a place where they lend you an umbrella in fair weather and ask for it back again when it begins to rain.”

19. The most fertile period for innovation is when people are in their twenties: from Nobel Prize winners, to entrepreneurs, to composers, to writers, real breakthroughs and greatest works tend to be the province of the young.

20. A complaint that’s well handled often leads to repeat business. The fascinating thing is that good service does not necessarily cost a firm more to deliver than shoddy service.

21. Beyond a certain point, the trappings of wealth are merely a game to keep boredom at bay.

If you are in a bind and need a quick gift for someone in the late teens to 30s, I recommend the book BALLSY: 99 Ways to Grow a Bigger Pair and Score Extreme Business Success by Karen Salmansoh.

It is in-your-face, real world advice and inspiration for your career, whatever field you’re in.  It’s the opposite of academic, and gives the advice a wise old CEO would give after a few gin and tonics.  It’s not a long book, it only has a few sentences on each page with pictures, but it focuses on the importance of marketing yourself and your talents, dealing with people, and getting yourself into positions that will eventually lead to more opportunity and “luck”.  I’ve found a lot of it to be true after being in the workforce for 20 years, and would have benefited from this type of advice early in my career.

Here’s a some of my favorite samples:

Tip #1&2 /  More important than talent, have balls.

Sure, talent matters, but if you don’t have balls, your talent won’t matter – because nobody will ever find out about all your swell stuff.

Fact: If you’re seeking extreme success, you cannot be afraid to go against the crown, make mistakes, look dumb.

If you want ot reach extreme heights in your career, get over your fear of fail.  You must become confident in your abilities to deal with any crisis or obstacle if you plan to pursue your passions with cockiness, vigor and sense of playful adventure need to snag ‘em.

Tip #3 /  There are no wishy-washy rock stars, no wishy-washy astronauts, no wishy-washy CEOs, no wishy-washy nobel price winners.

Be like a cockroach, survive everything nature and man can throw at you for millions of years.  If you get sprayed with a lethal dose of negativity, you must quickly wipe off your antennae, find your bearings and keep going for all those goodies!  Indeed, you must use each spray as a spirit strengthener to build up a strong tolerance for dealing with future sprays of negativity…and thrive against all odds.

Tip #4 /  Mom was wrong, it is okay to talk to strangers

• Start friendly conversations often.  Schmooze.  Network.  Join organizations.  Go to parties.  Go to galas.  Go to soup kitchens.  Never have cold feet about cold calling anyone you want to meet.  Depend on the kindness of strangers.
• Every person you talk to = 3 degrees of separation from someone you might want to talk to.  The more people you know, the luckier you’ll be.

Tip #39 /  Whenever possible, play with people who are better than you.

TIp #73 / Learn Under a Substitute Teacher

• When faced with a problem, substitute someone you trust and respect as being in your place – and imagine what they would do.

Tip #90 / It’s better to communicate difficult stuff sooner than to try to fix a really difficult problem later.

Always squoosh a work problem when it’s a mini.  The longer you wait, the bigger and scarier problems get.

The forums are temporarily down due to technical issues with the web hosting company.  I’ll get them back up shortly.  Thanks for your patience!

•  Update Feb 9, 2010: We’re back in business, all is fixed. 

This is off topic a bit, but nearly all of us has to deal with business cards.  Neil at QuickSprout blog compiled pictures of innovative business card designs.  It’s fun list.  Below are a few of my favorite:

I’ve written several times that investing your $150,000 nest-egg in the public markets and working a reasonably fun job is an underappreciated alternative to applying it towards a franchise. This article cites a study by Vanguard’s founder John Bogle regarding a 25-year study of a diversified portfolio return that on average has yielded 9.5% annual return.

What would you hope your franchise is worth in 10 years? Does $372,000 sound good for a selling price, on top of the wages you earn by holding a typical job? The $372k is the approximately growth of your $150,000 investment in the market compounded at 9.5% annually for 10 years.

A great article on the lowest cost (0.15%) diversified publicly traded investment portfolio in the world is here

http://etf.seekingalpha.com/article/42883

The decision to invest in and hire yourself to manage a franchise is a personal balancing test of many factors – lifestyle, family needs, risk tolerance, job satisfaction, financial goals, etc.  Satisfaction of an entrepreneurial itch is typically not met by franchise ownership because of the operating requirements and restrictions in the Franchise Agreement and Manual, which also constrains your income potential.  Most entrepreneurs want scheduling flexibility, tax advantages, no boss, net worth growth, ability to adapt business to maximize revenue, etc., which is minimal in single-unit franchising.

You are not going to believe this…

Consumer Reports conducted a coffee taste test, and the winner was [drum roll please]….Cuppy’s Coffee!!!…..OK, I kid. The winner was McDonald’s, who beat Dunkin’ Donuts, Burger King and Starbucks (I’m sure Starbucks loves being lumped into that group).

McDonald’s coffee “beat the rest,” according to Consumer Reports. It was “decent and moderately strong. Although it lacked the subtle top notes needed to make it rise and shine, it had no flaws.”

I agree.  I like the new protruding sipper lids.

As for Starbucks, its coffee “was strong, but burnt and bitter enough to make your eyes water instead of open.”

I somewhat agree.

I’m a big fan of coffee (with cream please). But, a friend of mine ruined my coffee drinking experience with one statement. He said “coffee looks and tastes like muddy water”. Now, when I drink my daily coffee with cream, I look into the cup and damn it, it looks (and sorta tastes) like muddy water!

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On a different note, do you want to know what investment bankers and M&A/LBO guys think about when they look at franchisors? They often look at breakup value and leveraging assets (primarily real estate of their company-owned stores) on the balance sheet.

…there were a few problems with our web host, but everything is now up and running.

I’ve spent most of past year working full time for a private equity and asset management firm. I thought I knew a lot about the private investment world before I started (I’ve been part of several business that received venture capital funding), but what I learned has been a tremendous eye-opener, particularly in seeing the naivity of investors.

My job involves handling and fixing issues (legal, financial, complaints, compliance, etc) that involve hundreds of investors. I often speak to investors when they have concerns or complaints.

I have a lot to say on this topic because I slap my head almost daily at the mistakes, misconceptions, and wholly amateur approach investors make when deciding whether to invest in my company’s real estate related investments and funds. This will be a multi-part series of postings that will be equally relevant to those looking at investing in private placement offerings and those looking to be a franchisee. The no-bologne, no excuse due diligence an investor in a private partnership should go through before locking themselves into an investment is nearly the same a potential franchisee should go through before locking themselves into a franchise.

Venture capitalist often repeat that they do not invest in “ideas”, but rather they invest in the “people”. I always hear that them say they’d much rather have a “C” idea ran by an “A” team, than an “A” idea ran by a “C” team. Focusing on the “people”, the franchisors or general partners, is indeed key from what I’ve seen. How well do you really know the people and managers you’ll be investing with? Have you done a background check on the managers? Have you asked for audited financials this deal and other deals? If they aren’t audited by a reputable firm, walk away…don’t believe the “we didn’t feel it was worth the money” crap excuse. Have you asked for the underwriting documents? If the deal is a preferred return structure and the general partner has built in equity to pay you the full preferred return for a certain period of time, do you know what that time frame is? Are they going to borrow money to pay your distributions? If you don’t know what I’m talking about, you are a fool to invest in a private offering deal no matter what they promise or claim is their past success.

Many complaints stem from misaligned expectations. In my view, the overly positive expectations of investors are their own fault for not doing enough investigation and due diligence. I once watched Jim Cramer from CNBC’s Mad Money show say, “I’d never invest in non-regulated securities (private offerings) because I want the protection.” Cramer formerly offered private offerings through his hedge fund too, so it’s a lot for him to admit that.

What people (potential investors or franchisees) seem to loose is their skeptical prudent eye when they feel comfortable with the salemen. You do know that your salesman is being paid a commission based on he get you to invest, right? You know some firms pay 10% or more to their brokers, don’t you? Do you know where that 10% commission is paid from exactly…it will comes out of your investment even if it is not represented in your capital account as such, so the partnership has to recover your commission to get you back to whole. The salesmen usually only knows enough details about the project to talk about it superficially, so his virtual “guarantees” are baseless beyond his own impressions.  Get to know these facts and be comfortable with their implications, please.  And for crying out loud read the darn PPM (private placement memorandum) and operating agreement (LP or LLC agreement), and have your lawyer review it with you in detail. 

Often in the world of private offerings, you meet the salesmen (broker or finder) from your religious organization, through mutual friends, clubs or other referal. Does that mean you should take their word without your own “real” research? Of course not.

Private placement offerings are (supposed to be only) offered through registered NASD broker/dealers, and these registered representatives are a very regulated group with stiff penalties for saying or promising too much.  If the person hasn’t taken the NASD tests to be certified (usually a Series 7, Series 63, or Series 82) and a member of an NASD firm.  However, firms often bypass the registered rep requirement by paying a “finder’s fee” to the person who made the introduction of the investor.

I will write later about what “real” due diligence and research consists of for the investor/franchisee. Out of the hundreds of investors I’ve seen at my company, in my opinion not one individual person has done enough due diligence before writing that big (sometimes multi-million dollar) check.

Maybe this will save you time if you are asked to give a best man toast in the future. I know I spent a lot of time trying to think of something to say, time that would have been better spent on business, frankly. I gave a best man toast in a wedding this weekend in Cincinnati. I liked the way it turned out, so here it is:

I’ve known Tom now for more than 10 years.
We first met at Miami University. We were both rushing the same fraternity.
At a fraternity party, Tom, being the gentleman that he is, offerered me a drink…I accepted…and we’ve been friends and brothers ever since.

The elements of Tom’s character that make his such a good friend to those of us at this table and in this room
are

• his loyalty,
• his honesty without exception – he cares enough about you to tell you the truth rather than what you want to here,
• his quick wit, his charm, his fantastic sense of humor, his magnetic and engaging personality
• and the list goes on……and on…

But most importantly…
the list goes on through the eyes of Ashley
who looks at Tom and sees
the man of her dreams…
the man who she wants to spend the rest of her life with.

I wish both of you a life together of health, wealth and bliss
that you both deserve.
Cheers.