'Must haves' for small business support

Source: EnterQuest (01 Jul 2010)

In the last few days Business and Enterprise Minister, Mark Prisk, has been reported as saying that the regional Business Links will be closed and their contracts wound down. This follows his pledge prior to the general election that the Tories would close Business Link and move the provision of support back to a local level through local enterprise agencies and councils.

This was confirmed in Prisk's interview with the Sunday Times a couple of weeks ago when he said that the coalition Government would scrap Regional Development Agencies along with regional Business Links, getting rid of the inefficiency and bureaucracy - something that EnterQuest has on many occasions reported as being the plague of the small business support sector over the last five years. Prisk also confirmed his intention to move business support into "Local Enterprise Partnerships", although the detail of how these will operate, where they will be located and who they will target has yet to be explained.

A radical overhaul of business support has been long overdue, no question about that. And the proposal to scrap the bureaucracy and waste that goes with it is like a breath of fresh air.

But what should happen next? Not all of what Prisk is saying, or what he is reported as saying, is coherent or clear.

For example Prisk has claimed on a number of occasions that only about 20% of the UK's small business community taps into publicly funded support. While this is true, this amounts to around one million existing small firms and new start ups that consistently seek out support every year.

In fact the real figure is probably higher than this as there are around 400,000 new start ups every year, with around twice that number considering a start up, and these businesses are intensive consumers of support.

It is one thing for the Minister to say that 80% will look after themselves (and are prepared to pay for it) via their accountant, consultant, coach, trade association or peer network. But another (and dangerous) thing to dismiss the million or so who genuinely need help and seek it out, yet can't afford to risk paying an accountant, coach or unregulated bible-bashing guru for the support they need.

If support wasn't available or accessible to them, they would either drop their idea, or start up unprepared, undercapitalised and unclear about how to run their enterprise...and be unlikely to survive for very long.

Now if the rhetoric from the new Minister is to be believed and much of the country's demand for business support will be met online via yet another (or yet another version of) a Government website and by the private sector - presumably through the Local Enterprise Partnerships - there could be a potentially disastrous loss of front-line expertise, along with the baggage and the bureaucrats that are being cleared out.

Our own experience and observations suggest that there are knee-jerk danger signs with some of the Minister's comments, although we acknowledge that the devil, as ever, will emerge in his team's detail about delivery. However there are a few basic principles and absolutes that they must get right:

  • Supply must meet demand. Rookie start ups have a common propensity for one thing - paying for as little as possible. To encourage and expand our small business enterprise base there are at least a million mouths to be spoon-fed each year with counselling, training and initial handholding in their early weeks or months of trading. And these are mouths which otherwise will have to be fed through the benefit system if the Government gets it wrong.
  • Consumption of support is best delivered through local face-to-face interaction. Some 90% plus of small businesses are local and increasingly home-based - locally based with local needs, local customers and local suppliers, and this includes the need for local expertise, advice, counselling, training, coaching and mentoring. Faceless impersonal online support is as much use as faceless bureaucrats deciding what has been best for business in the last five years.
  • Advisers and support practitioners (just as much as small business owners) need support to deliver an appropriate, flexible, measurable yet deliverable service to their target audience. They don't need to meet targets that only bureaucrats are interested in. They need to meet local start ups and local businesses, and meet their needs which are usually highly sector and trade specific and highly individual. Both small business owners and their advisers need facts, answers and encouragement - not forms and time-wasting boxes to tick.
  • There are no winners to be picked. Winners will pick themselves. The job of Government is to provide the environment that will allow the cultivation and encouragement of small enterprise and entrepreneurship. The more people who start up with the benefit of appropriate, timely support, the more winners who will emerge to become the next generation of employers which our country needs over the next decade.

Hopefully the new Local Enterprise Partnerships will allow the considerable expertise that subsists in the existing business support sector, in the private sector and also in the voluntary/not-for-profit sector to share that expertise with the maximum number of people who need it rather than with those who policy makers in Whitehall think are eligible for it.

However, the politicians and bureaucrats still have an important role to play, through ensuring that proper, transparent and systematic evaluation of any publicly funded support for business is reviewed and reported on a mandatory basis, with lessons shared and successes learned. There have been several unnecessary (and costly) business support wheels reinvented over the last 20 years, and mostly with policy makers oblivious to what has gone before. This cannot be allowed to happen again.

To comment on this article you can do so below.


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6 comments so far:

Anoor Ealuri (30 Jul 2010)

I wanted to put in my comments here, before I did, I read through all the other people comments, and I was left with nothing to say, how true and brilliant are some of them, I wish governments take a very close look at these suggestions and implement them, which will make a great difference to help people help themselves. Thank you.

Eric Roadknight (07 Jul 2010)

Isn't it amazing Gill how everybody who wants to sell their own business support service suddenly wants to contribute to forums about the future of Business Link.
Business Link Advisers deliver the service that is required of them by Government. I suspect many would agree that the current model is flawed and I know many BLA's would welcome the opportunity to contribute to a debate about the form that future business support should take.
Sadly that seems unlikely, not least because Mark Prisk has already made up his mind about Business Link.
I think it's clear that public-funded independent business support will cease and be replaced by an unregulated mish-mash 'provided' by the private sector.
The result will be that businesses that do not currently access public-funded support will welcome the change. Those that do use it now will be unable to afford it in the future and as a consequence their businesses will fail to grow, or just simply fail.
"So what" I hear you cry. Well, for the Mark Prisks of this world it's not an issue. A well-connected, well-educated professional who briefly ran his own consultancy business before pursuing his preferred career as a well-paid pompous politician he has no idea what it's really like to start and run a manufacturing business, for example, with nothing more than your meagre redundancy money and a lot of hope. For such people the independent information, advise and support provided by Business Link is invaluable.
Mark Prisk, like many other politicians should try to understand why he was given two ears but only one mouth - time to listen to businesses, Mark, unless your arrogance has made you deaf.

Keith Andrew (06 Jul 2010)

having been leader of Chelmsford Council that set up a Local Enterprise Agency I recognise the need for locally delivered face to face advice to many SME's, and that some of the best advice is not to start a particular business. I was then also involved when Business Link came along and was more about the Minister at thst Michael Heseltine having to be seen to do something different. I regret that this may yet again be about ego's rather than about delivering real support. Business Link had and contiues to have problems but the current strusture is probably the best that his been. You can offer business advice electronically but then that is already there with most accountants and consultants offering this and Business Link has a fairly full web site with access to lots of useful information, so to have another web site improves matters how? There is no substitute for face to face advice delivered by professionals that have the experience to convet and work with people be avaialble by agreement and at the end of a phone or an e-mail if required. What appears to be the ouline is not in my opinion good value for money or what most sme's need or want.

Geoff Link (06 Jul 2010)

Enterquest have got it pretty much spot on. Like all products that are marketed, you have to understand your market and tailor your offering to each segment according to their needs. I have spent the last five years or so running funded projects that help start-ups on a one to one basis. Because of that support, we get high survival rates over one and three years. More established SME's can look after themselves and only need help when they ask for it - ususally the private sector can deliver this. I do hope that LEP's will work to an agreed framework when it comes to business support, so that even if the support is provided on a local basis there is some kind of consistency across the country - we don't want post code lotteries again.

Jerry Bennett (05 Jul 2010)

Great in theory. What odds would you give that the first thing any Local Enterprise partnership does is go Empire building, and does so by insisting on a mass of damn stupid rules and regulations. Just because they are local, it does not exempt them from imposing the worst elements of bureaucracy.

So how about the following ground rules for these new LEPs?

1. All clients to be treated as individuals. Every business starts with one person with an idea. Even Bill Gates started as a one-man show. If we are truly going to develop an Enterprise Society, all these new-starts will need support, encouragement and quite possibly a boost to their confidence and self-belief, almost certainly face-to-face.

2. "People are the programme, activities are only a means of realising that programme". It follows on from point 1 (above). Every individual should be able to choose the type of help they receive, although many might need early advice about all that they need to know. No-one should be forced to attend things they do not specifically need. It is their future we are working with here. Clients usually give us the right to advise, coach, train or mentor, but never to dictate. All of us independent advisers and all future LEPs would do well to remember that.

3. Online advice is limited in what it can do. With many business activities there are a number of "possible right answers", and at this point a site such as the Business Link site starts to lose its effectiveness, as it doesn't help a "new start" make decisions. That is when the face-to-face meeting with a friendly adviser becomes critical.

4. If it doesn't benefit the client, don't do it! Another plea for an end to useless bureaucracy.

5. Enterprise contains some highly personal elements - creativity, imagination, initiative, lateral thinking etc. - that Agencies, including Business Link, have largely chosen to ignore. These need to be encouraged more in the future.

6. "If it works, do it!" The old EAP motto that we used so successfully in rural Cumbria. We helped many hundreds of clients into self-employment using all manner of day seminars or longer training courses, one-to-one advice, case studies and home study. It comes back to the issue of treating every client as an individual, with individual needs.

7. If a client doesn't fit the system, scrap the system!

Can all these points really work? They have done in the past, but only when a small organisation was running the programme with minimal interference from its funders. We can but hope, but I think hope is all this will ever be. Some damned bureaucrat will always want to impose a regulation somewhere, and one regulation will lead to several dozen more.

But if any Local Enterprise Partnership really does apply all those elements mentioned above, then even a rural cynic like me will start to believe in flying pigs.

Jerry Bennett

Gill Hunt (02 Jul 2010)

I have to take issue with your comment that advice has to be delivered face to face. Yes, this is often the best way - but it seems to me the change that's required is to allow business owners and those considering starting up to decide how they want to access advice - and what sort they actually need. The more sophisticated startups - who have a better chance of success - are put off using advice services because the one-size-fits-all approach means the services offered don't fit their needs. I think a mix of channels - with face to afce with REAL business advisers, not salaried employees, is the way to go - see http://www.skillfair.co.uk/content/1063/The-Future-of-Small-Business-Advice-Services.aspx


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