On the eve of polling day the enterprise agency movement has a great deal of thinking to do about its own future with a new political landscape. The movement has been adept at surviving all manner of changes both political and social over the years, but, with spending cuts of a magnitude never before seen looming over us like a sword of Damocles we need to start considering our own future.
I would guess that we have c130 agencies left around the country and there is a definite split growing between the "Premier League" and the rest. This is not meant in a derogatory way but is an observation based on size and sustainability. The NFEA has been like our industry FA safeguarding the movement but has the time come for major changes?
I wish to see the movement flourish but believe that this will be in a different way to that seen before. There will be more consolidation, mergers, joint working and, unfortunately, some failures in the months and years to come. If we are to remain as an industry then it is important that the NFEA responds to these changes and reflects the new network.
My personal vision is for a lean executive charged with lobbying and influencing in the corridors of power. This should be backed up with a small but effective Board who use their skills to support the executive and drive forward an unashamedly start up orientated business support structure. We need to be seen, heard and respected and with a new government we have a brief opportunity to shape the industry future.
I have no complaints with the current Board and executive but would like to see a clear strategy communicated to the membership of exactly what we are doing to safeguard the start up agenda in the corridors of power.
I also believe that it is important that the larger agencies should help fund this activity in return for a greater say in direction. The regional structure is now outdated and with some notable exceptions does not work effectively. We need the best, motivated and enthusiastic people to relentlessly push forward change and guide new ministers in their early days.
Perhaps once again I am at the sharp edge of reform and my ideas will not necessarily be met with agreement by all but inaction or wrong action now will condemn the NFEA to the dustbin of history as its relevance declines. Conversely there is a gap for a true leader in the enterprise field and the NFEA has the potential to claim this crown. Which direction will the NFEA take?
Wednesday, May 5, 2010
Monday, March 8, 2010
The NFEA manifesto - a blueprint for the future?
I have attached below a "manifesto" devised by the NFEA outlining their view of how we should be supporting new business. It has some interesting points and I will return to this subject and debate the individual merits at a later date. For now read on and let the NFEA know what you think.
As Britain slowly emerges from the deepest recession for almost a century, there is a focus on enterprise as never before. Enterprise has a great part to play in helping ameliorate the consequences the recession has had for individuals, families and communities, and to reduce worklessness. But there are deeper forces at work, independent of the current economic situation.
Ours is a society which is becoming more enterprising. In a fast-changing world, people are adapting to changing circumstances quicker and more effectively than ever, they are learning new skills, they are more confident to apply their natural abilities to innovate, they are more comfortable in taking risks and they are eager to take responsibility from an early age.
And ours is a society which is becoming more entrepreneurial. In Britain today, 72% of our businesses have no employees. This accounts for 12.2% of the workforce. 95% of our businesses have less than 10 employees, accounting for 25.5% of our workforce.
2.5 million businesses are based in the owner’s home, a figure that grew by 16% in 2008 alone.
As the attractions of enterprise and entrepreneurship increase, the attractions of employment in large organisations reduce. No longer do large corporations or public sector employers offer jobs for life, steady progression and a guaranteed pension. Indeed, the domination of employment by large organisations which has been a feature of society post-Industrial Revolution may come to be seen as an aberration, and most of the remaining large employers may be seen as an anachronism.
Throughout most of recorded history, we have been farmers, hunters, craftsmen, traders or merchants - living on our wits and our skills, and taking responsibility for ourselves and our dependants. Exactly the attributes the twenty-first century needs.
Small businesses -
• Are an engine of innovation
• Are the biggest creator of new jobs
• Are better at moving people into employment from worklessness
• Employ more disabled people, females and older people
• Offer more flexible employment
• Treat employees more fairly
A successful enterprise economy means both:
A faster growing economy
&
A fairer, more diverse, more cohesive society.
In all we do, our focus is on our clients, those brave people who seek to support themselves, their families and their communities through the skills of enterprise. They may be individuals establishing their own business, or groups coming together to form social enterprises. We are confident in our belief that providing the support they need is in the national interest. We leave others to debate systems, structures, processes and personalities: we will work positively and collaboratively with any individual or institution which shares our ethos.
Enterprise for all
In an ideal world, everyone who was interested in exploring the opportunities for starting their own business, or who wished to improve their business skills would be entitled to personalised, free and accessible support from a relevant professional.
We recognise that an element of prioritising is inevitable. However much of the prioritising is driven by myths.
Myth No. 1 - It is possible to pick winners at start-up stage
Long experience should have taught us by now that picking winners, especially in the early stages of a new business, is well-nigh impossible. Predictions rarely come to pass. Circumstances change. More importantly, too many real growth and innovation businesses are not identified and do not receive the support they deserve. And many businesses have their ambitions and aspirations transformed by exposure to professional business support at crucial points in their development.
Myth No. 2 - Lifestyle businesses are of little value and deserve no support
This is an extremely patronising approach to the vast majority of almost half a million people a year who start a business. They are becoming economically self- sufficient, they are plotting a route from benefit dependency, they are achieving a long-held ambition, or they are perhaps supplementing retirement earnings. They are all role models for friends and neighbours. And some of them will become businesses of substantial scale.
Myth No. 3 - Too many new businesses fail
It is often said that 1 in 3 new businesses fail within 3 years of start-up. This is a misreading of the figures.
Over 2 in 3 businesses survive for more than 3 years but not all closures represent failure: less than half the businesses which close are in financial distress.iv They may have succeeded and been sold to new owners. They may have closed as other better opportunities present themselves to their owners. They may have used the businesses as a bridge into employment, or to higher education. Whatever the outcome, they will have learned valuable skills and enjoyed valuable experiences.
We believe that the enterprise net should be cast as widely as possible. The more people who are engaged in new business starts, the more growing and innovative businesses we have. The more engagement with business support that they have, the easier it will be to identify the businesses which will benefit from specialist support.
Delivering enterprise support
Our experience, supported by a body of research, is that businesses and individuals want to see a tailored approach, rather than be "shoe-horned" into generic "one size fits all" schemes. They wish to be treated as individuals and they trust local deliverers, rather than increasingly remote government services or indeed what they see as civil servants. They value easy access, simple and effective delivery, local visibility and an understanding of the economy in which they live. They prefer a "one stop" approach rather than being "handed off" (a telling phrase) to others, particularly at the start-up stage, and where it is necessary to refer them to more specialised forms of support, they expect this to be done smoothly. And they expect the support they receive to
We recognise the need for innovation in business support. For example we have played our part in developing and promoting the new discipline of Enterprise Coach. We acknowledge the impact of the internet and regard www.businesslink.gov.uk as a superb source of generic advice (though it’s identification with government, and its combination of transactional and information material are obstacles in the eyes of some potential users). Social networking is increasingly important in signposting to sources of support or facilitating peer-to-peer networking. And the growth of the Internet is opening up new business opportunities for small businesses, which now, for example, have the ability to trade internationally far more easily than before.
But for a significant number of people, further support is required. It is important to remember that digital exclusion applies to those most in need of support. The demand for face-to-face advice is actually growing, possibly because many people need help in understanding the material they are provided with over the Internet.
To be truly effective, business support needs to be available across a range of media with the client provided with the option of following whichever route he or she feels most appropriate.
A comprehensive package
NFEA member’s experience, dating back to previous recessions and based on experience of involvement in over 10% of the national start-up figures, leads us to propose a model we have titled the Enterprise Escalator. It brings together tried and trusted approaches, is consistent with the Government’s Solutions for Business and is modular in nature, allowing for variations in local and regional priorities and budgets.
But the Enterprise Escalator provides a comprehensive customer journey, comprising:
• Outreach and awareness raising. We need to continue to raise the awareness of the opportunities entrepreneurship offers and to make specific efforts to engage with groups under-represented in entrepreneurship, both at a national and local level.
• Pre-start advice. It is important to evaluate individual’s skills and motivations to ensure they are consistent with a successful start. We should recognize that starting a business is not the right course for everyone and we should not set people up to fail. Thus there need to be links back to alternative solutions for those who decide against start-up, such as adult training and employment opportunities.
• Start-up training. Everyone should be entitled to introductory and basic training, in parallel with standard web, telephone and printed advice. In particular, feedback from our network, based on discussions with clients and the financial community, is that there is an enhanced need for financial management training, to facilitate renewed lending into the small business sector.
• One to one support. Our experience is that spending time with a business adviser is the most effective single form of support.
• Access to finance. There are obvious challenges in resourcing start-up grants and deploying them effectively. Small grants can be effective as a marketing tool, and we know that, utilised carefully, small grants can be vital in getting some small enterprises off the ground and unlocking finance from other sources. CDFI’s, particularly business orientated ones, need further support, and again can unlock much greater packages of finance from commercial sources.
• Mentoring. Provision of mentoring in the early stages of trading is limited at present. It should be available to a much wider audience than those receiving the intensive start up support.
• Networking. This can be a superb resource in terms of business development, confidence building and facilitating peer-to-peer networking which gets such high marks in most surveys of effective business support.
We recommend that the Enterprise Escalator be established as an outward facing title for this range of support mechanisms, the proportions of which, and the overall availability of which can be flexed as circumstances dictate. Additionally, new and small businesses need easy access to business premises, of which NFEA manage some, but not enough, and a supportive infrastructure. The regulatory burden needs to be cut, particularly in relation to the planning and legislative barriers to home based businesses and the roll out of fast broadband needs to be accelerated.
In summary
A successful enterprise economy means both economic growth and greater social inclusion.
Supporting people into self-employment is a cost-effective option for Government, even discounting the wider social and economic impacts. The way to have more high growth, high innovation and high employment start-ups is to have more start-ups of all types.
The demand is for accessible, credible and independent advice.
We need a logical Enterprise Escalator of support, which people can step on or step off from at different points and a government which provides a supportive business environment.
NFEA is the national enterprise network.
Our members are drawn from local enterprise agencies and a wider range of enterprise support organisations and provide an array of services to new and emerging businesses, including independent and impartial advice, training and mentoring to all who seek them. With roots dating back to the 70’s, NFEA members are social enterprises, with boards drawn from the local community, and have extensive experience of providing support to new and emerging businesses, and with representation in over 250 locations, they offer an unrivalled route to this market.
In 2008 alone, the NFEA network of enterprise support organisations supported over 100,000 pre starts, nearly 25,000 start ups and 130,000 established businesses - totalling over 250,000 clients across the country. Many NFEA members have expanded in scope and now provide advice and guidance to a wide range of clients ranging from young people in schools, colleges and universities, through the pre-start and early stages sector to established businesses. Many are able to supplement their core services with the provision of incubation and managed workspace where they support over 2000 businesses, and with tens of millions of loan and investment capacity.
Full NFEA members are required to meet exacting quality standards covering both their individual advisers and the organisation. NFEA owns, with a partner, Customer First UK Ltd, the national standard for Customer Service, and manages the Approved Local Enterprise Agency register on behalf of the Secretary of State
As Britain slowly emerges from the deepest recession for almost a century, there is a focus on enterprise as never before. Enterprise has a great part to play in helping ameliorate the consequences the recession has had for individuals, families and communities, and to reduce worklessness. But there are deeper forces at work, independent of the current economic situation.
Ours is a society which is becoming more enterprising. In a fast-changing world, people are adapting to changing circumstances quicker and more effectively than ever, they are learning new skills, they are more confident to apply their natural abilities to innovate, they are more comfortable in taking risks and they are eager to take responsibility from an early age.
And ours is a society which is becoming more entrepreneurial. In Britain today, 72% of our businesses have no employees. This accounts for 12.2% of the workforce. 95% of our businesses have less than 10 employees, accounting for 25.5% of our workforce.
2.5 million businesses are based in the owner’s home, a figure that grew by 16% in 2008 alone.
As the attractions of enterprise and entrepreneurship increase, the attractions of employment in large organisations reduce. No longer do large corporations or public sector employers offer jobs for life, steady progression and a guaranteed pension. Indeed, the domination of employment by large organisations which has been a feature of society post-Industrial Revolution may come to be seen as an aberration, and most of the remaining large employers may be seen as an anachronism.
Throughout most of recorded history, we have been farmers, hunters, craftsmen, traders or merchants - living on our wits and our skills, and taking responsibility for ourselves and our dependants. Exactly the attributes the twenty-first century needs.
Small businesses -
• Are an engine of innovation
• Are the biggest creator of new jobs
• Are better at moving people into employment from worklessness
• Employ more disabled people, females and older people
• Offer more flexible employment
• Treat employees more fairly
A successful enterprise economy means both:
A faster growing economy
&
A fairer, more diverse, more cohesive society.
In all we do, our focus is on our clients, those brave people who seek to support themselves, their families and their communities through the skills of enterprise. They may be individuals establishing their own business, or groups coming together to form social enterprises. We are confident in our belief that providing the support they need is in the national interest. We leave others to debate systems, structures, processes and personalities: we will work positively and collaboratively with any individual or institution which shares our ethos.
Enterprise for all
In an ideal world, everyone who was interested in exploring the opportunities for starting their own business, or who wished to improve their business skills would be entitled to personalised, free and accessible support from a relevant professional.
We recognise that an element of prioritising is inevitable. However much of the prioritising is driven by myths.
Myth No. 1 - It is possible to pick winners at start-up stage
Long experience should have taught us by now that picking winners, especially in the early stages of a new business, is well-nigh impossible. Predictions rarely come to pass. Circumstances change. More importantly, too many real growth and innovation businesses are not identified and do not receive the support they deserve. And many businesses have their ambitions and aspirations transformed by exposure to professional business support at crucial points in their development.
Myth No. 2 - Lifestyle businesses are of little value and deserve no support
This is an extremely patronising approach to the vast majority of almost half a million people a year who start a business. They are becoming economically self- sufficient, they are plotting a route from benefit dependency, they are achieving a long-held ambition, or they are perhaps supplementing retirement earnings. They are all role models for friends and neighbours. And some of them will become businesses of substantial scale.
Myth No. 3 - Too many new businesses fail
It is often said that 1 in 3 new businesses fail within 3 years of start-up. This is a misreading of the figures.
Over 2 in 3 businesses survive for more than 3 years but not all closures represent failure: less than half the businesses which close are in financial distress.iv They may have succeeded and been sold to new owners. They may have closed as other better opportunities present themselves to their owners. They may have used the businesses as a bridge into employment, or to higher education. Whatever the outcome, they will have learned valuable skills and enjoyed valuable experiences.
We believe that the enterprise net should be cast as widely as possible. The more people who are engaged in new business starts, the more growing and innovative businesses we have. The more engagement with business support that they have, the easier it will be to identify the businesses which will benefit from specialist support.
Delivering enterprise support
Our experience, supported by a body of research, is that businesses and individuals want to see a tailored approach, rather than be "shoe-horned" into generic "one size fits all" schemes. They wish to be treated as individuals and they trust local deliverers, rather than increasingly remote government services or indeed what they see as civil servants. They value easy access, simple and effective delivery, local visibility and an understanding of the economy in which they live. They prefer a "one stop" approach rather than being "handed off" (a telling phrase) to others, particularly at the start-up stage, and where it is necessary to refer them to more specialised forms of support, they expect this to be done smoothly. And they expect the support they receive to
We recognise the need for innovation in business support. For example we have played our part in developing and promoting the new discipline of Enterprise Coach. We acknowledge the impact of the internet and regard www.businesslink.gov.uk as a superb source of generic advice (though it’s identification with government, and its combination of transactional and information material are obstacles in the eyes of some potential users). Social networking is increasingly important in signposting to sources of support or facilitating peer-to-peer networking. And the growth of the Internet is opening up new business opportunities for small businesses, which now, for example, have the ability to trade internationally far more easily than before.
But for a significant number of people, further support is required. It is important to remember that digital exclusion applies to those most in need of support. The demand for face-to-face advice is actually growing, possibly because many people need help in understanding the material they are provided with over the Internet.
To be truly effective, business support needs to be available across a range of media with the client provided with the option of following whichever route he or she feels most appropriate.
A comprehensive package
NFEA member’s experience, dating back to previous recessions and based on experience of involvement in over 10% of the national start-up figures, leads us to propose a model we have titled the Enterprise Escalator. It brings together tried and trusted approaches, is consistent with the Government’s Solutions for Business and is modular in nature, allowing for variations in local and regional priorities and budgets.
But the Enterprise Escalator provides a comprehensive customer journey, comprising:
• Outreach and awareness raising. We need to continue to raise the awareness of the opportunities entrepreneurship offers and to make specific efforts to engage with groups under-represented in entrepreneurship, both at a national and local level.
• Pre-start advice. It is important to evaluate individual’s skills and motivations to ensure they are consistent with a successful start. We should recognize that starting a business is not the right course for everyone and we should not set people up to fail. Thus there need to be links back to alternative solutions for those who decide against start-up, such as adult training and employment opportunities.
• Start-up training. Everyone should be entitled to introductory and basic training, in parallel with standard web, telephone and printed advice. In particular, feedback from our network, based on discussions with clients and the financial community, is that there is an enhanced need for financial management training, to facilitate renewed lending into the small business sector.
• One to one support. Our experience is that spending time with a business adviser is the most effective single form of support.
• Access to finance. There are obvious challenges in resourcing start-up grants and deploying them effectively. Small grants can be effective as a marketing tool, and we know that, utilised carefully, small grants can be vital in getting some small enterprises off the ground and unlocking finance from other sources. CDFI’s, particularly business orientated ones, need further support, and again can unlock much greater packages of finance from commercial sources.
• Mentoring. Provision of mentoring in the early stages of trading is limited at present. It should be available to a much wider audience than those receiving the intensive start up support.
• Networking. This can be a superb resource in terms of business development, confidence building and facilitating peer-to-peer networking which gets such high marks in most surveys of effective business support.
We recommend that the Enterprise Escalator be established as an outward facing title for this range of support mechanisms, the proportions of which, and the overall availability of which can be flexed as circumstances dictate. Additionally, new and small businesses need easy access to business premises, of which NFEA manage some, but not enough, and a supportive infrastructure. The regulatory burden needs to be cut, particularly in relation to the planning and legislative barriers to home based businesses and the roll out of fast broadband needs to be accelerated.
In summary
A successful enterprise economy means both economic growth and greater social inclusion.
Supporting people into self-employment is a cost-effective option for Government, even discounting the wider social and economic impacts. The way to have more high growth, high innovation and high employment start-ups is to have more start-ups of all types.
The demand is for accessible, credible and independent advice.
We need a logical Enterprise Escalator of support, which people can step on or step off from at different points and a government which provides a supportive business environment.
NFEA is the national enterprise network.
Our members are drawn from local enterprise agencies and a wider range of enterprise support organisations and provide an array of services to new and emerging businesses, including independent and impartial advice, training and mentoring to all who seek them. With roots dating back to the 70’s, NFEA members are social enterprises, with boards drawn from the local community, and have extensive experience of providing support to new and emerging businesses, and with representation in over 250 locations, they offer an unrivalled route to this market.
In 2008 alone, the NFEA network of enterprise support organisations supported over 100,000 pre starts, nearly 25,000 start ups and 130,000 established businesses - totalling over 250,000 clients across the country. Many NFEA members have expanded in scope and now provide advice and guidance to a wide range of clients ranging from young people in schools, colleges and universities, through the pre-start and early stages sector to established businesses. Many are able to supplement their core services with the provision of incubation and managed workspace where they support over 2000 businesses, and with tens of millions of loan and investment capacity.
Full NFEA members are required to meet exacting quality standards covering both their individual advisers and the organisation. NFEA owns, with a partner, Customer First UK Ltd, the national standard for Customer Service, and manages the Approved Local Enterprise Agency register on behalf of the Secretary of State
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!
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
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.
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.
Monday, November 2, 2009
Pre Packs or Stitch Ups?
Are pre pack administrations a fair way to rescue failed businesses? As the economy continues to slip and slide more businesses are likely to fail in the coming months and years. The concept of a pre pack administration is to complete a complex financial restructuring with minimal adverse effect. Without doubt speed is important in dealing with any insolvent position in order to protect as much as possible but have we gone too far down this road with loopholes being exploited by unscrupulous individuals?
Where a protracted public sales process could damage the business, its reputation and consumer confidence then there has to be an argument for the pre pack as negative publicity can lead to a cash hemorrhage and significant job losses. But how common is this and does this concept still hold water with smaller or niche companies?
The law - whilst now strengthened with the introduction of SIP 16 for insolvency practitioners - is still open to abuse and has too many loopholes. Perhaps we should be asking why a business may not survive and once we understand this then the issue of a pre pack becomes much clearer. There are two key elements to survival - cash and good management. If a company has enough cash then a pre pack is unnecessary and if the management fails then it must be wrong to organise a pre pack with the same managers still in place!
Too often the losers in a pre pack are the small creditors who are forced into acceptance of a poor deal by bigger players and the fear of losing everything. Where the new owner is the original one there must be some mechanism whereby future profits are subject to a "pre pack" tax over and above normal taxation and which gets distributed to those who lose out under the original agreement. Otherwise everyone may as well dump their debt burden and undergo a pre pack.
I still believe in integrity, honesty and fairness in business dealings and pre packs fail to pass these tests in too many cases.
Where a protracted public sales process could damage the business, its reputation and consumer confidence then there has to be an argument for the pre pack as negative publicity can lead to a cash hemorrhage and significant job losses. But how common is this and does this concept still hold water with smaller or niche companies?
The law - whilst now strengthened with the introduction of SIP 16 for insolvency practitioners - is still open to abuse and has too many loopholes. Perhaps we should be asking why a business may not survive and once we understand this then the issue of a pre pack becomes much clearer. There are two key elements to survival - cash and good management. If a company has enough cash then a pre pack is unnecessary and if the management fails then it must be wrong to organise a pre pack with the same managers still in place!
Too often the losers in a pre pack are the small creditors who are forced into acceptance of a poor deal by bigger players and the fear of losing everything. Where the new owner is the original one there must be some mechanism whereby future profits are subject to a "pre pack" tax over and above normal taxation and which gets distributed to those who lose out under the original agreement. Otherwise everyone may as well dump their debt burden and undergo a pre pack.
I still believe in integrity, honesty and fairness in business dealings and pre packs fail to pass these tests in too many cases.
Tuesday, October 27, 2009
It's time to get in line for an award from the Queen.
Whilst time is tight to get your nominations in I would urge everyone to look at the Queen's Awards. These really are the equivalent of an Oscar in our industry and recognise those companies and individuals who have had a major impact.
What I like about these awards are that you have to prove what you have done as a company or individual which goes beyond the day to day expectations. Introduced in 2004 these annual awards close for nominations on 31 October and so you do not have much time to get those entries in.
All too often we fail to celebrate individuals and companies who have made a real difference and so spread the word and if it is too late for this year make sure that you put a note in the diary for next year!
Just follow the link to www.queensawards.org.uk to learn more. There seems to be a real lack of representation from the East of England in this years awards so let us try and rectify that for next year. We have a lot to be proud of.
What I like about these awards are that you have to prove what you have done as a company or individual which goes beyond the day to day expectations. Introduced in 2004 these annual awards close for nominations on 31 October and so you do not have much time to get those entries in.
All too often we fail to celebrate individuals and companies who have made a real difference and so spread the word and if it is too late for this year make sure that you put a note in the diary for next year!
Just follow the link to www.queensawards.org.uk to learn more. There seems to be a real lack of representation from the East of England in this years awards so let us try and rectify that for next year. We have a lot to be proud of.
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