Love, Pain & Money

Love, Pain & Money backs four of Tom's lessons. Under each of his lessons, what the book says about it, and on which pages.

• Assumptions made too fast, and risk avoided

  Caudwell weighs every factor and then backs his own judgement against advisers, matching the concept's call to combine data with backing yourself instead of avoiding risk. pp. 48, 62 and 225. In the book: Preparing the Caudwell Group for sale.

• Signals show before numbers, and numbers come at month four

  He acts on a tiny plume of smoke on the horizon and on small signs such as a limp handshake long before the numbers move. pp. 212 and 225. In the book: Selling a business with desire and fear, Preparing the Caudwell Group for sale.

• A brand that compounds has a mission and an enemy

  His childhood Rolls-Royce dream gave the business a mission, and Motorola gave him a named enemy that put him in war mode. pp. 27, 113 and 169. In the book: The phone business turnaround, The Transportable arbitrage.

• Move the people you have before you hire

  He puts the right person in the right job, splits roles with Brian when senior staff leave and builds the team around people's strengths. pp. 66, 69 and 109. In the book: The phone business turnaround, The Transportable arbitrage.

John Caudwell argues that his fortune grew out of a frightened, bullied childhood in Stoke-on-Trent that taught him to prepare hard, accept every dare and never back down. He built his first fortune by seeing the mobile phone early, hunting for margin with price and commission graphs, and surviving the betrayals of Belstaff and Motorola by never again letting one supplier hold more than 10 percent of his business. He sold the Singlepoint network for £405 million in 2003 and the whole Caudwell Group for £1.46 billion in 2006 by building desire and fear in buyers and trusting small signals over the advice of his bankers. He is equally frank about what it cost: the postnatal and prenatal depression that broke his marriage to Kate, an affair, five years of refusing to see his daughter Scarlett, and a decade of helplessness over his son Rufus's illness. Money, he says, matters as a way to change other people's lives, so he pays the overheads of his charity, Caudwell Children, and has pledged 70 percent of his wealth to charity.

• Weigh every factor, good and bad, and take the option where the good outweighs the bad, so what looks like risk to others is a calculated decision (p. 48).
• Know your staff inside out and put the right person in the right job, because putting his wife Kate in a corner shop she hated cost him a year and a lot of debt (p. 66, p. 69).
• Be completely honest with customers and explain every negative before the positives, because it makes them trust you and come back (p. 112).
• Reputation behaves like a brand, so a car that has sat unsold for a few weeks goes back to auction even at a loss (p. 80, p. 84).
• Plot supplier prices, volumes and commissions on graphs to find where the hidden margin is, then use arbitrage so both sides win (p. 112, p. 114).
• Never rely on any one company for more than 10 percent of business, a rule born when Motorola, 95 percent of his supply, cut him off (p. 134, p. 137).
• To sell a business, plan A, B and C, build desire and fear in the buyer, use stalking horses, and tell a price chipper in advance that you will walk (p. 213 to p. 218).
• Get on the ground: a manager who sells nothing and answers four hours of email is a symptom, and banning group email lifted profit by £100 million in a year (p. 222, p. 223).
• Pay the overheads yourself so 100 percent of donations reach the cause, and give your children enough to be safe without making them rich (p. 169, p. 258).
• Relentless work has a bill at home: he missed Kate's postnatal depression, and anger kept him from his daughter Scarlett for five years (p. 90, p. 182).

• How do you build a personal brand that generates inbound rather than requiring outbound?

  Reputation did the approaching: the local Conservative Association asked him to host Margaret Thatcher (p. 156) and journalists kept asking who John Caudwell was (p. 166).

• Which of my stories travel, and which only feel like they should?

  The details that travelled were the Marks & Spencer suits and cutting his own hair, the rags to riches shape that reporters seized on (p. 166).

• What is the smallest team that can produce at the volume I am used to?

  Two brothers and a few staff sold sixty cars a month (p. 79), and a small phone team sold 150 phones a month (p. 106), with bar charts and bonuses driving output per head (p. 110).

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