Thursday, February 18, 2010

Halting the meddling?

The Sunday Times brought us an article by Mark Prisk (Shadow small business minister) about business support under a Conservative government. Whilst I can hear the gnashing of teeth in some quarters I can only applaud what could be good news for Enterprise agencies and business start ups.

I have previously argued for a light touch from government, which should seek to create the conditions to start and grow a business and then let the market dictate degrees of success. Enterprise Agencies are ideally placed to meet this need as mentioned by Mark Prisk and indeed have been doing so successfully for 30 years. Our error was in not getting together as a strong national group for too long, not sharing good ideas and allowing the concept of Business Link to be nurtured rather than strengthening what was already there.

The fact that we have survived for 30 years is testament to our sustainability and so the proposal to go back to our roots and have government funds match our income for a three year period is spot on. The detail needs to be agreed but if we could match our income it gives us a chance to build on our solid foundations, invest in income generating assets and break free of government support which in future can be targeted where it is needed - if at all.

We are impartial social enterprises rooted in local communities and as such sit ready to grasp this opportunity. Combine this with a new Enterprise Allowance type scheme and a new spurt in business starts could be seen along the lines of the 1980's. Some will fail but that is free market enterprise, many will thrive and provide the country with a more diverse business base less reliant upon "big business" and less exposed to the risks which that entails.

Too many government departments seek to meddle and launch new initiatives. It is the small things which can make a big difference and if there truly is simplified legislation and repeal of the plethora of unnecessary employment law then business will get behind it. History can and should influence the future so when you have something good - nurture it!

Thursday, February 4, 2010

Doug Richard - Visionary or Misguided?

I encourage you to read "The Entrepreneurs Manifesto" from the pen of Doug Richard. This is a concise, passionate and thought provoking pamphlet which is worthy of wide debate. I have criticised his previous offering the "Richard Report" which whilst it contained some excellent points they were lost in easily dismissed and - dare I say - inaccurate assumptions. However Mr Richard has moved on and is obviously warming to his theme.

Who could really disagree with his points on a burgeoning state with the answer to many of our problems being the enterprise and ingenuity of the new breed of entrepreneurs? The answer is probably plenty of people in the public sector but does this mean that Doug Richard is wrong? For what my opinion is worth - No.

In this document he is espousing a vision and so it is light on the "how and when" but it is for others to refine the detail. I believe that we stand faced with a wonderful opportunity which only comes along once every generation - the chance to effect major change for the general good. The financial crisis should allow us to question everything and wipe away the status quo - whether it does or not is in our hands. Will we elect a government with the strength to do what is right instead of what is popular? Does any party offer us this choice?

As a social enterprise ourselves we stand firm behind the rationale that we have the potential to offer more than purely profit driven organisations. We take a long term view which does not have to take into account shareholder return - this means that we have grown quicker than the average company, produce greater surpluses and help more people. In other words good business needs a vision and this is what government in general tends to lack.

So what should we disagree with in the "manifesto"? Well I would counter the sweeping argument about business support and instead put forward that it is new enterprise that keeps the market fresh. As such put time and money into incentivising new business starts from a wide sector of society, nurture them for 12 months, equip them with the skills to survive and thrive and then it is time to allow them to make their own way without government help. So 7/10 for this one Doug - it just needs some refinement! Otherwise this is A* and one can only hope that whoever gets elected works out the detail as a matter of urgency and implement the actions without delay. Or is this just wishful thinking.........


www.schoolforstartups.co.uk

Tuesday, February 2, 2010

Lowestoft - UK capital of enterprise

A few years ago Lowestoft faced one of the worst periods in its long and distinguished history: low levels of entrepreneurship and enterprise; a failing business community in declining industries and a lack of aspiration amongst its population. Having drifted into the 15% most deprived places in the country, action needed to be taken if the town was not to descend into complete deprivation.

As major employers such as Shell and Birds Eye either relocated or reduced their presence in the town, they left behind a declining business stock and a fragmented supply chain.

Aspiration amongst young people was low with the main priority being to “escape” the area. Levels of educational attainment lagged behind the regional and national average and with traditional low skills jobs fast disappearing levels of unemployment started to soar.

Enterprise and entrepreneurship was in sparse supply with the area having the lowest number of business start ups in the East of England. It seemed to be a forgotten area when it came to provision and take up of business support initiatives and few role models for people to aspire to. For those who did go on to start up in business the stock of office and workshop space was of a very low quality, old and decaying. The town was not attractive to speculative developers who could gain greater returns on their investment elsewhere.

Despite these problems it was possible to find enterprise in some unexpected areas – visionary teachers in local schools, community leaders, local councils and of course NWES. Whilst there was no grand conference held or glossy strategy written there was an informal network established between these individuals, each of whom undertook to make a difference in their specialist area.

As the local enterprise agency NWES acted as the catalyst to ensure that change occurred. Over the last few years we have helped to transform the town to the extent that unemployment levels are lower than the regional and national average, there is a greater and more diverse mix of businesses operating and we are looking to the future by establishing Lowestoft as the UK centre for renewable energy.

We have taken a business like approach to everything with sustainability being the key. By investing £3m+ of our own money we have also levered in capital funds from the local authorities and the RDA to provide a ring of managed workspace catering from light industrial requirements through to a state of the art Innovation Centre for the Renewable sector.

On their own buildings offer little, it is the activity within which determines the success or failure in reaching your objectives. By linking in with High Schools, we have started the process of enthusing young people with the desire to be enterprising, opened their eyes to the exciting opportunities in new sectors such as Renewable Energy and established a sense of pride in their town.
Within our centres we provide intensive training and 1-1 support for any aspiring entrepreneur; free of charge. Our role is clear – to be a trusted friend to anyone considering starting or growing a business. We are known as “the place to go to” and act as the enterprise hub referring clients on to the “spokes” such as Business Link, Princes Trust, Universities and colleges as appropriate.

We believe that most things can be replicated if required and this is the case with what we have achieved in Lowestoft. There are a number of base “rules” which need to be considered and met if intervention is likely to succeed:

- Managed workspace can be made to work in any size of town
- In deprived areas it will require public sector capital intervention to succeed
- Centres must be operationally in profit after 3 years
- Break even rates should be set at 70% occupancy
- “easy in, easy out” terms are what tenants want
- The building alone is not enough. It is what happens inside that encourages enterprise
- A well publicised start up training programme along with one to one support is crucial to deliver sustainable business starts
- Large public sector led “partnerships” will not achieve much. What is required is a small cadre of determined people from all sectors who will actually achieve the desired outcomes
- Do not concentrate on quantity but on quality. Penetration targets and similar are meaningless - there is no “one size fits all” provision and effort should be made to encourage sustainable start ups not some arbitrary target.
- Do not compete on price (we are the most expensive in the town but the service is the best).
- Invest in the most deprived areas as this has the maximum effect as a catalyst for further investment

The desire to regenerate through enterprise is a core element in the strategy of most areas and regions; however the rhetoric is not often transformed into reality. What has been demonstrated in Lowestoft with the aid of NWES is that vision, strategy, persistence combined with an element of stubbornness and a refusal to take “No” for an answer can make a real difference.

Lowestoft is “on the edge” both in terms of geography and in enterprise activity. We have shown how deprivation, seasonal unemployment, low investment levels and a cycle of despair can be halted and reversed. The town has not had the benefit of copious levels of government spending seen elsewhere and yet it stands as a case study of how to generate enterprise through a combination of selected capital investment combined with innovative services to stimulate entrepreneurship from disaffected pupils in schools through to growth businesses in new technology areas.