By George Derbyshire, retiring Chief Executive of NFEA – the national enterprise network
Until recently there was a tradition that retiring British ambassadors sent the Foreign Office a valedictory dispatch, a parting shot, a chance to get a few things off their chests about their hosts, their employers in the FO and occasionally their colleagues.
As I start to clear my bottom drawer here at NFEA, I thought this might be an interesting precedent to follow, without of course the libels which brought the original tradition to a close.
I came into the enterprise advisory world cold. Apart from a brief experience of dealing with small business customers early in my banking career, most of my time had been spent in the large corporate world. So what have I learned as Chief Executive of NFEA – the national enterprise network – over the last nine years?
1. Plumbers don’t fail because they can’t mend a dripping tap. They fail because they get their pricing, their cash control or their sales and marketing wrong.
2. Successful businesses need basic business skills and knowledge – see above. The good news is they can be taught.
3. There are a number of ways to acquire knowledge and skills – and most people will prefer to use a combination of methods. But face to face is a preferred method for many people.
4. Giving people the confidence and support they need to start a business is a job for professionals not amateurs.
5. You don’t need to have had a stellar business career to be an effective business adviser. A bit of street cred is useful of course. But you don’t have to have been a mother to be a midwife, or a criminal to be a lawyer.
6. As well as economic benefits, promoting new enterprises can help deal with social problems as well. And make no mistake; we have deep-seated social problems in this country. The Social Exclusion Unit tells us that worklessness in the worst tenth of streets is 23 times worse than in the best. A third of children in London are growing up in homes where no one works. 65% of households in council houses have no-one earning a wage. And the position will have worsened in the few years since these statistics were collected. We are getting increasing concentrations of social and economic deprivation, which is being passed down through the generations.
7. Enterprise cannot solve all these problems of course, but it can make a difference. You don’t need qualifications to start a business, you don’t need a long CV and references, the hours are flexible as is often the location. And people who survive in our benefit culture are often extremely resourceful and resilient.
8. People who start small businesses often do so in their own locality. This creates positive role models, can provide useful services to the community, potentially create jobs and certainly adds to the average income of the community. The policymakers talk about “multiple deprivation”. Promoting and fostering enterprise in deprived areas can hit multiple targets.
9. Enterprise promotion is a great thing. Positive role models, confidence building and supportive stories can encourage people to realise that their ambitions need not be limited. But we fail people; we let them down, if we encourage them to take the enterprise road without providing the practical support they need to be successful.
10. And talking of success, it’s true that not all new start businesses survive into the medium term. But that doesn’t mean that the opposite of survival is failure. Businesses close because people retire, or sell up, or go back into employment or education with new skills. And most businesses which are wound up do so without financial distress to third parties.
11. You can’t pick winners. We need to ensure that everyone who has the aspiration to start a business is helped, appropriately, to do so – and then encouraged to maximise their potential. The high growth businesses of the future will then identify themselves. No one would have identified the Body Shop as having the potential to turn into a multi-million pound international business. Vodafone started as a small project within a large corporate. Nobody envisaged that it would in a short time outstrip its parent and gain its own independence. (Whatever happened to Racal, by the way?)
12. Government can and should support enterprise – but that doesn’t mean it has to do it itself. Far better to use trusted independent and impartial (and cost-effective) intermediaries.
13. Indeed Government has effectively nationalised business support with the successive iterations we have seen of the Business Link model. The enterprise agency movement would not have come into existence without the support of private sector partners, many of them marshalled by Business in the Community. You can’t blame the private sector for devoting their philanthropic budgets to other causes if the Government is pouring money into the sector.
14. Finally, nothing in life moves in straight lines. Life is about cycles. Colleagues in the enterprise agencies are tightening their belts as they have done many times in the past. A more supportive environment will emerge sooner or later, and in the meantime they will still be there for their clients.
So, what would I like to see as the next iteration of business support policy?
I’d like to see a recognition that the half a million people a year who start a small business are doing something worthwhile for themselves, for their families, for their communities and for the nation as a whole. And I’d like to see some of these people recognised, alongside our celebrity entrepreneurs and the glamorous, venture capital-backed, science park glass boxes. And of course I’d like government to provide a supportive background in terms of taxation and regulation and effective procurement from small businesses.
I’d like enterprise to be a standard part of the curriculum in the education system and presented not just as weasel words about being enterprising in employment but as an opportunity to succeed without an employer.
I’d like business support to be recognised as a profession in its own right, with qualifications, codes of conduct and its own professional body. And enterprise organisations providing a proper career structure for their people.
I’d like government to endorse face to face advice as the gold standard of business support. Websites are great, and so are mentors, but they are not the total solution.
And I’d like the private sector to engage with enterprise agencies again. What better use of a large business’s social responsibility budget than encouraging small business?
To see George’s final interview in The Telegraph (3rd May 2011), visit http://www.telegraph.co.uk/finance/yourbusiness/8490639/Government-business-support-to-fall-off-a-cliff.html