‘Everything we cherish about this country can only be built on the bedrock of a flourishing culture of enterprise and achievement.’ – Gordon Brown, 2004
As Chancellor of Exchequer, and now as Prime Minister, Gordon Brown is putting some energy into the drive for a more enterprising culture in Britain; he has promised that he will cut tax and regulation for small/medium business, that he will inject a measure of enterprise into the education system, that he will work to improve the image of enterprise and break down the barriers to business.
All excellent news, and things are changing, slowly. Graduates are far more likely to want their own business, far more young people than before see business as a high status activity, and across the board people want to become their own boss rather than work for one.
But – and it’s a J-Lo sized but – they don’t know where to start. The biggest mental obstacle is the fear of failure; this is still a highly risk averse culture.
The single biggest barrier to setting up in business, however, is lack of access to money. A Treasury report in 2004 picked up nothing new – there’s a big gap between those who want money, and those who have it to invest. Tax breaks like EIS (enterprise investment scheme) have had an impact, but it doesn’t help those without the spare £10,000 to invest.
There is a vast amount of institutional money looking for good homes, but apparently few businesses they deem worth investing in. It seems that as well as an equity gap, there is a communication gap. Actually, there are several – between various segments of the business community. The North West is one of the UK’s worst regions for believing that one should or could start a business. So do we organise therapy to improve self-esteem in entrepreneurs, or business skills classes?
Can you teach enterprise? Entrepreneurs are born, not made, but some of them may need their eyes opening to the possibility of using their natural talent to grow a business. Young Enterprise is a superb example of how to introduce teenagers to the world of business – kids need to know that an entrepreneur can spring from any background, regardless of age, education, gender, class, nationality, religion, or fashion sense.
Whatever information is needed can be read, bought, or found on the net; business success can come at any age, and the world is big enough to offer markets to everyone who can identify the opportunities.
On Merseyside, social enterprise is taking hold, with the number of small community businesses being started, funded and mentored to success. Unless we do something proactive to take the whole region – including the disadvantaged areas and the disaffected people – with us on the economic revival, the place will polarise and will be in danger of splitting apart again.
For once the government and the private sector are in full agreement. So let’s spread the message and hold the government to its promises.
• 7,000 people were surveyed recently; a year later of those who said they were planning to start a business, 15% had taken action, 53% were still thinking, and 32% avoided the question.
• In 2004 there were 3.7m SMEs in the UK, of which some 2.5m are self-employed individuals. As a whole they produce 4% of GDP, have annual turnover of £1 trillion, and employ 12 million.
• Blue collar startups account for 55% of all UK new business registrations.