Entrepreneurs are the lifeblood of the economy. It was therefor no surprise that David Cameron said ‘there’s only one strategy for growth we can have now, and that is rolling up our sleeves and doing everything possible to make it easier for businesses to grow, to invest, to take people on’.
Posted on 18th October 2013 in Great British Entrepreneur Awards.
The calibre of the sponsors for The Great British Entrepreneur Awards reflects not only the standard of the awards themselves, but the importance of entrepreneurs to the nation’s economy.
Last year’s estimates from the Department for Business and Innovation revealed that there are over 3.5m British companies with only one employee, equating to 75% of the entire number of businesses in the UK. Micro-businesses are the backbone of our economy yet they continue to receive minimal support from banks or the government. It is not an exaggeration to claim that crowdfunding is now one of the only viable options for the continued success of micro-businesses in this country.
The pressures on small businesses during and since the recession have been well documented. As banks have become increasingly reluctant to lend to businesses in need of funds, SME cash flow has suffered and the economy as a whole has stalled. In response to the funding challenges facing small businesses, the Government has launched several initiatives to try and counter these issues and encourage money to flow more easily between banks and SMEs.
Driving on the motorway recently I pulled in for a burger. The outlet was quiet and the burger display board hidden. “May I have a burger?” I asked, puzzled. “Sorry, no burgers,” was the reply, “there was a fire alarm yesterday morning and they didn’t deliver.” If it happened the previous day, surely someone could have delivered burgers to the outlet by the next afternoon? No burgers equals no operation. My learning? Don’t make innovation your top priority for 2014; make the operation, your first priority.
After more than thirty years as an entrepreneur, I have come to exactly the same conclusion. I could even go further; I am now convinced that the single most important success factor for any entrepreneur is their ability to find and then retain good mentors.
It is often assumed that raising external, or third party, equity is a prerequisite to business success. In the majority of cases, this could not be further from the truth. Most businesses start with very limited funding. This is typically provided by the founder, or by family and friends on an informal basis. As these businesses develop, they bootstrap their growth, using their own profits and assets to finance their needs. As a result, they get to keep their potentially valuable equity in the hands of the founder or the family, along with the choices and freedom that brings.
It is easy to think that raising finance for your business will be hard when banks are not lending, people seem to have less money to invest and the economy gets worse.
However, nothing could be further from the truth. There are very generous tax breaks for people who invest in businesses like yours, there is more money for investing than ever before and there is a completely new type of investor that is waiting to invest in you.
The following interview with Stuart Miller, CEO and co-founder of ByBox, the logistics business, is part of ‘The Entrepreneur Interview’ series by Guy Rigby, Head of Entrepreneurial Services at Smith & Williamson.