17/09/10

By Tony Heywood

Last month (August 2010), the FSB's quarterly Voice of Small Business Index called on the government to do more to support job creation. Tony Heywood from www.Yoodoo.biz, the website which supports and encourages aspiring new business owners, argues that the most effective route to job creation is for the government to encourage the development of new businesses.

Unemployment is set to continue to rise for the rest of this year, thanks to a raft of public sector job losses and plenty of insecurity in Britain’s boardrooms. The Treasury has often stated that it expects existing businesses to step in and embrace this growing pool of latent talent; but UK plc’s jitters have translated into very conservative recruitment policies and every quarter’s unemployment statistics suggest that few sectors are in growth-mode.

Yet Britain is not short on ambition. Far from the media picture of a society crippled by benefits dependency, the majority of the newly unemployed are in some way skilled, qualified and motivated — ideal qualities for entrepreneurship. Some 17 million people in the UK harbour the ambition to start their own businesses, yet thanks to a lack of self-belief and basic guidance, only a tiny proportion ever achieve it.

To achieve the twin benefits of kickstarting the economy and preventing another million people from falling into the inertia of long-term unemployment, the government therefore needs to think creatively about effective, low-cost solutions to encourage a new generation of business start-ups. Until we can say that government efforts have potentially touched every one of these 17 million would-be entrepreneurs, we cannot claim to have done our best to resolve the UK’s economic woes.

What might such a solution look like? The Coalition is already dismantling the old business support services (Business Link and the Regional Development Authorities), so change is already afoot. Business Link fell into the trap of engaging almost exclusively with the existing business community — the sort of self-starting entrepreneur who would more than likely achieve some success whether assisted by the government or not. Instead, the Local Enterprise Partnerships (the replacement for RDAs) must offer support at grass-roots level, to reach the vast swathe of people who have hitherto been denied the practical help and support they need to succeed.

Then, the support offered must be comprehensive. Too often, Business Link was accused of existing only to sell third-party services. Instead, the government’s offering should give aspiring business owners the strategic know-how to turn ideas into profits. Very basic training on idea generation, market research, funding and banking etc. can profoundly influence the success of new businesses run by first-time entrepreneurs.

Finally, this support must be tailored. In business, one size definitely does not fit all. Potential entrepreneurs come in all shapes and sizes and with all levels of education and experience. Business Link might have spoken very effectively to the experienced, middle-aged line manager, striking out on his (yes, almost certainly a man) own for the first time. However, tomorrow’s new businesses will be dreamed up by A-level students who haven’t made it to University; retired people needing a top-up income for their later years, unemployed people desperate for an income and a challenge; and the many people fed up of chasing a living in the rat race and looking for more fulfilment. All of these people require different levels of know-how and support in order to succeed. A universal offering is guaranteed to fail to engage effectively; whereas personalised and bespoke mentorship is the ideal solution.

Small businesses are the fastest route to economic recovery, and nurturing these new businesses must be a top priority. If the government is serious about stimulating the economy through new and existing business, it must provide an accessible, comprehensive and personalised service to the mass market of latent entrepreneurs who are so critical to our economic recovery.