Business Stripped Bare

Richard strips business down to show how you can succeed and make a difference This entertaining read will be an invaluable business guide for years to come.

Read an excerpt from the book

I was in my early twenties when the owner of a west London nightclub invited me and my friends round for a drink. We turned up there that evening and the door staff unceremoniously threw us out: we'd had the front to turn up in jeans.

Back home, I made a call: 'Is this somebody's idea of fun?' The owner was apologetic. 'Please, Richard, it was a terrible mistake. Come round, I really want to talk to you.'

He really did. It turned out that the club was a money pit, and the owner was desperate to off-load it on to the first likely-looking target that crossed his line of vision. In the early hours of the following morning, I shook hands on a deal that made me owner and proprietor of a roof garden on Kensington High Street. And as it turned out I didn't lose my shirt over it (we let people in with jeans!) - and the club is still mine.

I was last there on 29 September 2008, launching the first, hardback edition of this book. The publishers wanted me to say a few words. The headlines that day had given me perfect material for the launch of a book of business advice. We had reached one of the great and memorable milestones of the current global recession. The United States House of Representatives was due that day to hand an eyewatering $700 billion to US and foreign banks in an attempt to shore up collapsing credit markets.

'And painful as this is,' I said, 'it's as well that this is going to happen. It staggers me that banks worldwide have failed to protect against the downside, and it angers me and just about everybody else that, rich and poor alike, we're having to pick up after them. But we have to. We need to make banking trustworthy again. We have a stark choice: this package of bail-outs, or another Great Depression.' My phrases had an unexpected effect. My audience buzzed. They squirmed. They stared into their outstretched palms - and a deep, expectant silence descended. Okay, I thought, this is weird - and I ploughed on.

What I said then - and it's repeated again and again in this book - is my first rule of business, and if you take nothing else from this book, take this: you have to protect against the downside.

In business, as in life, risks are essential. Take no risks, and you will not succeed; take moderation to extremes in your personal life, and you won't even truly live. Before you can take a risk, however, you have to understand that risk. You have to reduce that risk as far as possible. And you have to know, in detail, what the world will look like should everything go catastrophically wrong. I am not saying 'Don't take huge risks'. Over the years, I've taken risks that could have severely damaged Virgin. What I'm saying is this: They were calculated risks - risks I and the people around me were willing to take, once we had taken everything into account. Whether or not observers liked what they saw, the fact is we knew what we were doing. Can every bank CEO say the same today? Can every chancellor?

When I finished speaking, a publisher friend, Richard Cable, came up and offered me a glass of champagne. 'Best drink this,' he said. 'What's up?' 'The call came through as you were speaking.' He showed me the message on his Blackberry. 'I thought you'd noticed.' Now I understood: my audience was full of business people, and they had all had their phones set to vibrate, hoping to catch the news when it came through. And here it was. I read it. Then I read it again. Richard raised his glass. He did not smile. 'They threw it out?' 'By twenty-three votes,' said Richard, gently lifting his phone from my fingers. The House of Representatives had just rejected the bail-out package - and the next day the US Dow Jones index saw its biggest one-day points fall, dropping nearly 7 per cent.

The publishers have asked me to bring this book up to date, in the light of recent events. 'About ten pages should do it,' they said. Ten pages?! Six months have passed since the hardback came out, and you don't need me to tell you that six months is a long time when the world is teetering on the brink of financial ruin. Things look different today. In most respects, they look worse. The House did finally authorise President Bush's $700 billion rescue package, and a few months later it approved Barack Obama's $900 billion 'stimulus package', too. Has the US stemmed the collapse of its financial system? The brutal truth is that nobody knows. This has made the idea of offering 'business advice' a strange, perhaps even a rather treacherous task. Still, I stand by the advice in this book - every word of it. Here, you will learn about business from my personal perspective. Except, perhaps, for the debt I owe my family for teaching me the value of money, I have learned how to do business entirely by doing business. I haven't peddled any theories, because I don't follow any. Instead, I keep my eyes open. These notes will give you an idea where I think we stand today. The chapters that follow will show you how I'm going to handle tomorrow.

- Business Stripped Bare