of the transaction in business. It set me up for bigger things to come. At the time, of course, the lesson didn’t interest me. I spent the money on baseball cards, comic books, and other things that kids enjoy. Little did I know that this was my first real lesson in economics.
Lesson Three: Begin with an Idea. This lesson was introduced to me at a family picnic when I was seventeen. Family friend Pete Buck suggested that I open a small sandwich shop. He saw a need for one, and that was the idea for Subway. We spent a few hours talking about the idea, and later that day Pete and I became business partners. The idea was so simple that we got started the next day.
Take a look around you. What needs to be improved? Where is there a void? Ask others for their opinions. Eventually you’ll find a good idea.
Nowadays, it seems all the big business ideas are coming from the recent technology of the Internet. Talk about starting small and finishing big, some of these dot-com businesses have created overnight billionaires! But even many of these companies started with a simple idea.
Lesson Four: Think Like a Visionary. After Pete and I agreed that we would start a sandwich business together, he then suggested that we set a long-term goal. That’s when I first realized the importance of creating a vision for your business. Pete suggested that we open thirty-two stores in ten years, a rather incredible goal, but big enough to capture my attention and commitment. That goal would help keep us focused during the difficult times that awaited us.
It’s not enough to have an idea. It’s important to look beyond the idea. If you implement the idea, then what? It’s really important to ask the “what” questions. What will result after we open the business? What can it become? What value can it provide? What good will it do for me emotionally and financially? What is it about this business that will capture my commitment, my energy, and money?
From those questions come the answers that will help you create a vision for your business. Think big when you create that vision! Give yourself the opportunity to get excited about your idea and the future.
Lesson Five: Keep the Faith. I learned this lesson within six months of getting into business. That’s when Pete and I realized our first sandwich shop was an economic failure. At that point, it would have been so easy to give up the belief in our idea, and our vision, and close our business. Fortunately, we didn’t take that approach.
Building a business is a challenging commitment and the challenge never ends. Many days the future of your business will look bleak. You’ll run short of money, you’ll lose customers, vendors will disappoint you, employees will sometimes take advantage of your business. Many things can go wrong. When they do, you can expect at least some of the people around you to say that you should forget your “crazy idea” and do something else, like get a job! But during these times you cannot lose faith in yourself or your business.
Starting a business as a teenager was actually a blessing for me. It never occurred to me that I couldn’t succeed, and people didn’t discourage me because, after all, I was young. There was always time for me to rebound. Consequently, on those bleak days that come with every business venture, I might have been disappointed, or emotionally down, but it never occurred to me to give up faith in what we were doing and what we could accomplish.
Lesson Six: Ready, Fire, Aim! I learned this lesson by opening the first restaurant without any experience. In other words, I learned it by doing it and not just thinking about it. With clarity about the idea for Subway, and at least a glimpse of the vision, I went to work the next day! Someone else might have taken time to plot out the job requirements and to write a business plan, but doing those things may have prevented me from actually starting. There’s a good chance the planning process would have consumed my energy. Or I would have decided that what I thought was a good idea wasn’t such a good idea after all.
As I’ve discovered on many occasions since starting Subway, it’s better to fire in the general direction of where you want to end up and then adjust your aim, than never fire at all. Get started. Move in the general direction of where you want to go. Make course adjustments along the way.
Lesson Seven: Profit or Perish. Early in Subway’s development I found out that it’s easy to make a lot of sales and still not make a profit! That’s when I learned about profit or perish. One day my accountant congratulated me for generating annual sales in excess of $1 million for the first time. But in the next breath he also explained that unfortunately I had lost $100,000 that year! How could that happen? It didn’t take me long to figure out there are only two ways to make money: increase sales and decrease costs. Believe me, this is a lesson worth learning as soon as possible. It’s a lesson that we teach our franchisees at Subway.
Lesson Eight: Be Positive. I learned this lesson in the midst of building the first few Subway shops. From an economic point of view, those first shops were disastrous. In the process of locating and building those shops, I made many mistakes, as might be expected of someone who was inexperienced and had no real plan. The early failures could have boxed me into a negative mind-set where it might have been nearly impossible to solve problems and make real progress. Fortunately, that’s not the path I chose. I’m sure it helped that I was young, and I also had a business partner who set a positive example. Where there were challenges, we sought solutions. And even when one solution didn’t work, we sought another and another until we worked through the challenge. It’s a lesson that I continue to practice every day that I’m involved in business.
When you’re faced with seemingly insurmountable obstacles, it doesn’t help to be negative. Keep a positive mind-set.
Lesson Nine: Continuously Improve Your Business. This is a lesson that may not become apparent until you’re faced with competition. Businesses do not stand still. They may fall behind some times, but those that succeed do so by continuously improving their operation. Progress requires that they introduce new products, new ways to serve their customers, new ways to market, new ways to get ahead of everyone else. This is not a once-and-done experience. It’s continuous.
Even today, when we introduce new ideas at Subway, our competition won’t be far behind. The only way to stay in business is to continuously make these improvements.
Lesson Ten: Believe In Your People. One of the greatest assets in any business is people. That’s been reinforced for me over the years, but even so, I learned this lesson the hard way. You’ll enjoy the story that follows if you’ve had to learn this lesson the hard way, too.
One night I walked into a Subway shop and found a mess behind the counter. There was food everywhere. I read the riot act to the employee who was working alone. “You’ve got to keep this place clean,” I demanded of him. I helped him clean up and then sternly said, “Don’t let this happen again.” And I left the store.
The next day, much to my surprise, I discovered that store had set a new sales record for the most sandwiches sold in the shortest period of time. That’s when I realized the place was a mess because our single employee was working hard to serve our customers. As I looked further into the matter, I discovered he had experienced a rush of business just before my appearance at the store. He never had a chance to clean up the mess, and I never gave him a chance to explain.
That night I went back to the store to apologize to our employee. But he told me not to worry about it. He said it was okay. Intuition told me it wasn’t okay, so I coaxed him to open up. “Are you sure?” I asked. “I feel bad about what happened.”
He then admitted that he was angry with me, and he wasn’t able to get his work done because he was thinking about how badly he had been treated. An hour or two later, he said he was still angry! That’s when he decided he had to do something to work out his aggression. “After you left
