the case for micro business owners supporting...
TRANSCRIPT
4 www.better-business.co.uk Better Business No 193
A QUESTION OF SUPPORT
Towards the end of the last millennium, along with a band ofother business owners, I challenged
the Government and banks’ accepteddoctrine – that everlasting business successcomes to those with a thirty-page businessplan (with all boxes ticked) who weretrained, dressed and spoke like corporatemanagers. This has earned us much criticism and the labels of being ‘negative’,‘troublemakers’ and ‘out of touch’.
We chose not to follow the establishedpractice of asking academics, televisioncelebrities and large company chief executives what should be done. Instead,we asked small and micro business ownerswhat they had to do, and needed to know,in order to survive and thrive in theirbusinesses.
We looked at what factors improvedthe survival rate of start ups and whatbusiness support and training is available in countries that are acknowledged asbeing better than Britain at developingsuccessful new businesses.
And then in January 2012, Tina Bodenand I founded a global band of microenterprise owners, intent on makingbusiness life better for the whole of theircommunity. We’re on a mission to improvethe skills, knowledge and survival rates of those starting and running their ownenterprise in Britain.
So what exactly are these principlesthat we believe will provide the most useful support to prospective and existingmicro enterprise owners in the UK?
1There are a lot of us but we’re worth helping
There are a lot of micro businesses in theUK and we’re growing in number everyyear (there are currently 4.5 million of us –95% of all businesses). We’re difficult forGovernment to reach and engage with. It would require an army to support usenough to improve our cumulativeperformance.
These are all big reasons why noGovernment will provide significantbusiness support and training to microenterprises.
With start ups and existing micro enterprises, Governments attempt to either‘pick winners’ who are deserving of theirlimited funds and support, or they ensurethat as many of the unemployed or those‘on benefits’ as possible go self employed.It still doesn’t represent a significantamount of publicly funded businesssupport. Indeed, four successive Governments have given over 95% of allGovernment employment, support andtraining funding to the minority 5% oflarger UK businesses.
These 5% of larger companies are on a downward spiral, and have been for a decade, in terms of the number of jobsprovided to the UK – and the amount ofcorporation tax they pay, too. The stock of micro enterprises in the UK continues to increase as the availability of jobs inlarger companies decreases. Up to a half amillion people a year are starting their ownbusiness, not because of the Government’senterprise policies, or because they want tobe the next Bill Gates, but because for mostit is the best, or only, available way to earn a living.
Micro enterprises are worth helping.New micro enterprises provide most of the new jobs and most of the innovation,and micro enterprises make the mostsignificant contribution to their localcommunities.
Give start ups the right help over thefirst eighteen months of their existence and two to three times as many of themwill survive more than three years. Indeed,some research has shown that as many as85% of businesses, with the right support,can survive over three years and 6% willbecome substantial employers.
Frustrated by many years of his recommendations toGovernment ministers falling on deaf ears, TONY ROBINSONhas taken the bit between his teeth and set up an alternative approach to providing micro-business support.
The case for micro businessowners supporting themselves
We’re on a mission to improve the skills, knowledgeand survival rates of those starting and running their own enterprise in Britain
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2Micro owners are the best peopleto help micro owners
Micro enterprise owners understand andrecognise what it takes to earn your livingfrom running your own business. Govern-ment understands more easily what to doto help businesses with over 10 staff, andespecially medium sized enterprises withover 50 staff (the M in ‘SMEs’). They under-stand them because these enterprises lookmore like the organisations their businesseducation and training described to them.
These ‘SMEs’ are businesses withformalised missions, strategies, plans,budgets, systems and processes. They have managers and leaders that lookand behave like politicians and bankers.They consider these larger businesses as‘serious’ and likely to provide the winners for theeconomy. Access to finance is the hot topicso that banks can invest in ‘SMEs’ for them to grow bigger andemployees can trade in their employmentrights for a share of the success. The high tech, globalbusinesses of the future will come fromSME start ups and they’re likely to be foundin universities and business schools.
Micro enterprises, especially the selfemployed, are often misclassified andmisunderstood, by anyone other thanmicro enterprise owners themselves, as just ‘lifestyle’, ‘freelancers’, ‘not seriousbusinesses’ ‘not entrepreneurial enough’,not ‘wealth creators’ and were even oncedescribed to the author of this article as ‘the great unwashed’.
It is true that most micro enterpriseowners will encourage start ups, if they can,to bootstrap rather than borrow, to testtrade online (on third-party platforms) andoffline (via markets/car boots/exhibitions)and to start their business while they are ina job or have another source of income. As importantly, unlike Government, microenterprise owners do not believe everyoneis suited to starting and running their ownbusiness and will positively discouragesome people from doing so. All this isimportant to survival rates.
Many government-funded start-upschemes put the emphasis on the loan or investment, the big business plan,management skills and a mentor withmore generalist business experience
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The Enterprise Rockers
Enterprise Rockers was established byTony Robinson and Tina Boden in January 2012. Since then they have been working hard to grow their global band of micro enterprise owners. Their band, and the support principles that have underpinned their community, are those that Tony has researched and proven overmany years.
The Enterprise Rockers is a free-to-join-in community with thousands ofdifferent opinions, hundreds of differentcampaigns led by different people, andno single political or lobbying position.The Rockers have come togetherbecause they share one common belief.The belief is that business owners arethe best people to help other businessowners to keep going – to help eachother to survive and thrive.
For more information, go towww.enterpriserockers.co.uk.
Tina Boden
than the start up. Most micro enterpriseowners believe that a newly redundant corporate executive advising a start up in any capacity is just wrong.
So micro enterprise owners have adifferent view to that of Government – who knew??
3Gaining the essential skills and know how The skills and know how requiredto start and run a businesssuccessfully depend on the type of business and must be viewed in the context of what the business ownerconsiders to be successful for that type of business. Most business owners need to have someone in their business that is competent at winning and keepingcustomers, making deals, managing cash-flow, handling the regulations surroundingthat business and providing the productsand services. In most cases, especially atstart up, the business owner will do all ofthese.
They are very different abilities fromthose that most corporate managers have.The business owner’s main role in nearly all
micro enterprises is winning and keepingcustomers. Whether you can persuadeenough customers to buy your product or service is the acid test of whether youhave a viable business idea and why testtrading is vital. Yet in larger companiesthese customer-facing roles are delegatedby managers to, often, the lower paid staff.Not that micro enterprise owners can afford be status and salary conscious – the average earnings of a micro business
Tony Robinson
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fully competent business advisers that can help in the pre-start and early start-upstage. Most of their services are free orsubsidised to new starts because of publicfunding or sponsorship. There are manyother fabulous organisations, like theBritish Library and the UK-wide networkof public reference libraries, towards which NEN members can point pre startsand start ups.
Once someone has started in businessthey can join the Enterprise RockersCommunity free of charge. There’ll alwaysbe another micro enterprise owner thatcan suggest where to get help and there is every type of expertise and type ofbusiness within the community.
4A ‘rocking’ enterprise future
As the Regional Development Agencies,Business Links and Sector Skills Councilsnetworks were providing less and lessbusiness support and training to start ups
owner in the UK are equivalent to that of a supervisor or team leader in a largecompany.
So it’s not surprising that most microbusiness owners believe that it is best for anew business owner – the start-up periodcan take eighteen months – to get theseskills and know how from other businessowners and experts like accountants andbusiness advisers. Experts who have runtheir own business and understand thetype of business being run.
It is often a case of getting what youpay for and is why accountants help 39% of start-ups and professional businessadvisers 15%. Contrast this with volunteermentors, business networks, friends andfamily, which together are trusted and used by only 5% of start-ups seeking help.
All is not lost if a new business ownercannot afford to pay for start-up help. Many Government schemes do come with a health and wealth warning but theNational Enterprise Network (NEN),formerly the National Federation of Enterprise Agencies, has members with
and micro enterprises, their demise has not been felt that greatly by 95% of all UK businesses.
Instead, the credibility gap betweenpeople running their own enterprises andGovernment and banks has widened. Thisis no bad thing as it means there is littledemand for most Government schemessuch as volunteer mentors. The Start-UpLoans scheme cannot afford to fail so theincentives for providers are high, which is worrying, but hopefully most of the start ups getting these loans would haveborrowed anyway, but at a higher cost.
The positive is that many newcampaigns and support programmes thatare funded independently from nationalGovernment are beginning to fill thechasm. Clare Rayner with her Indie Retailcampaigns and Kate Hardcastle with her Positive Image campaign are just two.Equally, people like Fay Easton and herEnterprise Hub Network are taking theday-to-day problem solving and tradingopportunities through low cost businessaccommodation to new heights. Hubs are formed by a mix of contemporarybusiness space, collaborative members and customised support systems, all ofwhich clients love.
All around the UK, business owners like Nigel Hudson, Johnny Stobart and Alan Briggs are setting up their ownoffline support networks and enterpriseclubs. Lorraine Allman has already developed fantastic online Speed Mentoring and Bartering platforms for the Enterprise Rockers. Stefan Topferand Winweb have developed specific apps that are exactly right for start ups and micro business owners.
We hope that Government will finallylearn to ‘go with the grain’ and enable theprivate sector to better support start upsand micro enterprise owners. Governmentcan then focus their interventions onimportant structural issues. These includereducing business rates on the high street;reducing energy costs to small and microbusinesses (as they are doing in Malta);improving regulatory guidance and thetribunal system; specifying that all thoseorganisations in receipt of public fundingthrough subsidies, loans, support or assuppliers to Government must pay all their bills within 30 days and so forth.
That’s how a partnership betweenGovernment and the enterprise sector will really get Enterprise Rocking. n
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Most business owners need to have someone intheir business that is competent at winning andkeeping customers, making deals, managing cash-flow, handling the regulations surrounding thatbusiness and providing the products and services
Left to right: Kate Hardcastle, Tina Boden and Clare Rayner
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