Lessons from Subway Founder Fred DeLuca

The following article was originally printed in the March issue of Axiom's newsletter. To view the newsletter in its original format visit the Axiom web site.

        Fred DeLuca is one of the two founders of Subway, the international sandwich chain that has seen phenomenal growth in the last two decades. This easy to read book chronicles some of the company's startup activities and is filled with anecdotes and case studies of other famous and not so well known entrepreneurs.

There are two audiences that I think can get a lot from this book. The first is people considering opening their own business. There is a tendency to think businesses require tens or hundreds of thousands of dollars in financing and thick business plans to get started. This book should put those misconceptions to rest if you have them.

I don't want to give the wrong impression. One of the biggest mistakes we see is undercapitalized businesses, and DeLuca himself devotes a whole chapter to the maxim "Never Run Out of Money." Still, there's more to a successful business than financing and, you'll have to understand that before you start out on your own.

The second group that should read this book is business owners envious of competitors who somehow, someway manage to be more successful with less financing, smaller product lines, inferior locations, etc. If you find yourself asking "how did they do that?" then this book will get you back to the basic ingredients of success that are often forgotten after expansion, relocation or a period of fast growth.

DeLuca outlines 15 lessons he thinks are essential to small business success. They are...

1. Earn a Few Pennies
2. Begin with an Idea
3. Think Like a Visionary
4. Keep the Faith
5. Ready, Fire, Aim!
6. Profit or Perish
7. Be Positive
8. Continuously Improve Your Business
9. Believe in Your People
10. Never Run out of Money
11. Attract New Customers Every Day
12. Be Persistent
13. Build a Brand Name
14. Opportunity Waits for No One
15. Take the First Bold Step

I have given this book to a few people that are starting or are thinking about starting their own business. I read it before I struck out on my own and it helped give me some peace of mind that I was thinking about the right things. There is something about DeLuca's story telling style that proves both instructive and inspirational.

Interestingly DeLuca's personality and the story of Subway are not exactly the best examples of sound business planning. The fifth rule in particular seems to apply to DeLuca and those who usually leap before they look probably won't stop long enough to read his book. In that sense there may be some disconnect between DeLuca's personality and that of his audience.

However, the book provides a great alternative framework for developing a business plan that I've used with a few people who don't relate well to the traditional analytical business planning approach. In that sense DeLuca's 15 lessons provide a great outline for turning someone's passion into a viable business that both customers and bankers can relate to.