How does a person with no banking experience or qualifications go about setting up his own bank? That’s partly what this book is about. Dave Fishwick, the author explains his attempt to take on the banks by creating a much smaller, but better bank. This is a book I had seen on the bookshelves and thought, oh no, not another one of them self promo books, but I’m glad I decided to read it because it was very enlighthening. Written in straight forward language, Dave goes a long way in explaining the banking system and how it has failed in layman terms. He also writes about his view of business which I found refreshing.
So if you are interested in understanding one man’s view of banking and why we had the financial crisis of 2008, then this is a good book to read. But it will also open your eyes to how some of the banks operate and what I will call some of their really silly practices. Generally this is an interesting book and at times funny. It reminds me of reading Alan Sugar’s biography as it goes straight to the point. It’s also not a massive book with just 285 pages running through 11 chapters sectioned into three parts. I am not going to do a chapter by chapter review as I usually would, rather I will be writing about some of the key lessons I learned from the book.
Here are my lessons:
- Learn to fight back: When Dave was young he was bullied at school. It didn’t help that he was small, not good at sports and terrible at his studies. To him, there was nothing he was good at. But the day came when he stood up for himself and fought back against a guy who always bullied him. He had a punch out with the guy and won. That changed his life as he learnt to fight and not just let people take advantage of him.The lesson is clear – stand up for yourself and fight back.
- Everyone’s good at something: Dave left school at 16 to become an apprentice builder. It was work that he hated. His big break came when he found out he liked cars. He managed to get a car, do it up and resell it, and it was something he was passionate about. He did this a second time and a third time and discovered not only was it something he enjoyed but he was good at it too. Soon he was able to quit his apprenticeship and focus on cars. Dave had discovered something he could do very well. He wasn’t useless after all. Nobody is, we only need to find something we are good at and enjoy, then give it our best shot.
- When you spot an opportunity, go for it: Dave started out buying cars, repairing and reselling them. But when he advertised a van he had bought and repaired, his phone never stopped ringing. Vans were hot cake. So many people wanted them because they were business assets. Dave had discovered that vans moved faster than just cars. He decided to focus on vans and today Dave runs a company that makes and sells vans and also provides credit to people who need to buy them. The opportunity that Dave spotted when he was 16 has made him a millionaire. Many times we spot opportunities and do nothing about them either because we are scared or don’t believe we can do it. Be like Dave, just give the opportunity a try, you never know what will come out of it.
- The bit in the middle: Dave has a simple view about business, and it’s this – be aware of the bit in the middle. In simple terms, the difference between how much a product costs and the amount you sell it is the bit in the middle. If you make sure that the middle bit is always present, then you make profit and you are in business. He also warns us to not be carried away by revenue. Just because a business earns a lot of revenue does not mean it is a very profitable business. For example Mr. A runs a shop and at the end of the month earns £2000 in revenue, the bit in the middle, his profit is £400. Company B is a big corporation which generates revenue of £1 million pounds monthly with the bit in the middle being £100,000. While company B generates much more revenue, percentage wise it is less profitable than Mr. A whose percentage of profit from the revenue is 20 per cent. Company B’s percentage is 10 per cent. A lot of the big corporations even operate at a loss despite generating large amounts of revenue. Dave believes you go into business to make profit and not generate large revenues.
- Banks are not necessarily helpful: Dave believes that banks don’t necessarily help people that really need credit. He writes about a time when a bank manager came to visit him just to loan him money. This had never happened to Dave before and also he did not need the money. The bank had been given a directive to lend out a certain amount of money. Dave didn’t take the money, but told the bank manager to go out into the community to find the right people who needed the money and lend it to them. Of course this didn’t happen. This incident only cemented Dave’s belief that most banks don’t exist to help people, they only serve their own interests.
- Look for a problem to solve: Dave started a bank or Burnley Savings and Loans (he wasn’t allowed to call it a bank) because he saw a problem he wanted to do something about. There were lots of small business owners in Burnley who needed credit but the banks wouldn’t give it to them. So he decided to get in on the problem and provide a small solution. While he would not be able to solve the whole problem he could at least do something about it. When he tried to apply for a banking license, the requirements were so stringent that he knew he wouldn’t be able to do it in the 180 days target he gave himself to set up the bank. Getting a banking license would take him years. So what did Dave do? He spoke to different people who were involved in setting up financial related companies and was able to come up with a solution to start his small bank. While it didn’t operate exactly like the big banks he was able to start solving the problems by lending ordinary people in Burnley money. He also met his 180 day target which was to launch the bank and make profit also. There are problems all around us, big and small, and solving some of them will not only help others, but make our lives better too. So which problems are you solving?
- You can’t succeed without learning: For a kid who left school at 16 with very little qualifications to become a millionaire and set up a small bank does not just require hard work, it requires a lot of learning. One thing evident about Dave is how much he has learnt. His account of banking history and the events that led to the financial crisis of 2008 point to someone who is well read. When he was about to set up his bank, Dave met with different people asking questions and learning about the industry. He even went to New York to learn about trading. Dave is what I call a consumate learner. When he decides to do something he learns as much as possible about it. No wonder he’s been successful, he does not do things he hasn’t learnt about, therefore he is a knowledgeable business man. Just like Dave if we want to succeed in anything we must be ready to spend time learning about it.