13 comments so far:

Lin (19 Jan 2012)

I agree with the argument that the government shouldn't encourage people to set up everyday services for which there is a lack of demand.

However, we need to keep in mind that 'enterprise' means to spot market gaps and create something new. There is no problem with the government supporting the latter.

Thus, support should go to genuinely enterprising people, not those who try to compensate on not being able to find a job.

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Tim (09 Jan 2012)

This is the best assessment of the situation we are in; a thought-through documentation which needs to sink into headline grabbing vote catching rulers, few of whom have a real grasp of what is needed beyond"Westminster village"

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Steve Munden (06 Jan 2012)

I believe Mary Portas is on the right track in cutting red-tape. I doubt she means to suggest a big free-for-all with no rules. In the end everything runs to the ethos of ‘survival of the fittest’ which is nature’s way of maintaining the best and getting rid of the bad.

The example of hairdressers is made – well I doubt people are going to stop getting their haircut just as I doubt people will stop buying food. The demand is there. Where and how much customers will pay for things and how it is demanded will vary and it’s up to businesses to adapt and understand their customers.

Frankly if new businesses turn up and better understands that need whilst existing ones fail to adapt then it’s good that they will fail. They will make way for better businesses who will better serve their customers and in turn the economy. It’s those businesses that will be able to afford to employ those who can’t run their own! To suggest we discourage new business because we don’t want to offend the competition is ridiculous.

As for rogue traders – if consumers have wide choice then these traders will not be around for very long, but if we discourage new business then existing rogue traders may well manage to keep going for longer.

It’s quite clear that businesses and consumers are returning to local trading again as it becomes more expensive to travel and to move goods. After all why do business abroad when you can trade with your neighbour? I believe this is why so many large chains and companies are failing while many small businesses are growing. Things are changing. We need to adapt. It’s clear that everyone having an employed job in a large organisation (including the public sector here) is simply not going to be a norm over the next decade. People need to learn to go back to basics, start small and support their local communities and economies. We have had a generation of employed people with an employed-only education. We need a better return to self employment to allow people to survive on their own two feet. This requires education – not from government business support units, but via the education system itself. Children need to be prepared for this before they enter the workplace. Things are no longer going to be put on a plate for them.

Discussion of imports and exports are wonderful when looking at the economy as a whole but in the end the nuts and bolts of the country are run by small local businesses and it is these we need to be actively encouraging.

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Neil Davey (06 Jan 2012)

As ever, a well argued case but lets remember that there are people who wish to start a small business and no matter what their circumstances or the reasons for trying self employment they need as much help as possible. We know the deficiencies of the web based support propagated by inexperienced and unknowing civil servants etc so those of us who are active in the real world providing face-to-face support must ensure we are visible. A major element of my job is to ensure people do not start an unviable business. Lets hope the lessons are learned by government and resources are returned to live advisors and not spent on what amounts to old fashioned distance learning via a website.

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Bill Miller (06 Jan 2012)

I could not agree more. There are only three ways to generate more business income. (1) Create something new that no one else has. (2) sell more to the people who currently buy from you or (3) take clients from competitors. Options (1) and (2) are difficult but not impossible, number three is the problem. It's only effect is to reduce the revenue of already stretched existing businesses to a point where neither survive.

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Michael Huxley (06 Jan 2012)

I support the starting of many businesses as my day job but I despair at the ill-considered pressure to encourage many of the un-employed to start new businesses. The majority will fail bringing devastation and hardship plus the outcomes noted of divorce, loss of homes, depression etc. plus the knock on effect and costs to the local economy and social support services.

I spend time with prospective new businesses to assess the potential commercial viability of their new idea. About 40% prove to themselves that it won’t work. The remaining 60% still have to prove it will work in the real world and there is still a high failure rate, mainly through problems with “Partnerships” falling out, or lack of drive – nothing to do with the business idea.

In a past role I’d help businesses assess new ideas and then >80% stopped working on the idea immediately as the assessment identified things they hadn’t thought about and caused sufficient concern to ditch the idea. Of the remaining 20%, <1% actually made it to market and only ~ 30% of those were successful. This ties in with research that shows that 99.7% of “great” new business ideas fail to achieve the ROI expected of them that was used to justify the investment in the idea in the first place.

Yes some of the respondents below have been successful and advocate starting a new business, but please get real and realize that you are in the 0.3% who had an idea and made it a successes. Yes there is more outsourcing but there is also much less cash to buy these services and oversupply will only drive down your income potential – will it be worth it? Good luck to those who do try but get every bit of help you can and be honest with yourself about its potential and implications.

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Richard Downey (05 Jan 2012)

What the business world needs more than ever is real and deep public spending cuts (public spending is at record levels despite what you hear from the BBC) combined with serious tax cuts (income and vat - flat rate 15% for both?) to put money back in people's pockets so they can spend and save again and provide an incentive for real world business as opposed to the current focus on low capital gains tax as the 'reward' for business.

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Don't be daft (05 Jan 2012)

I started up as an accountant 2 years ago following redundacny from senior finance role, best thing I have ever done, more job security than I've ever had & a greater income!

Across my 115 clients there are start-ups which have created a total of 50 or so jobs, many not paying employers NI for now due to the holiday here in the North West.

The good thing about recessions is that weak business models get busted, and strong new blood comes through and wins market share.

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Charles Payne (05 Jan 2012)

Agreed, Hi-Tech; innovative; exporting companies should be helped. However, the bread and butter companies who already create employment and pay taxes must not be forsaken in the quest for jam tomorrow. It is those companies that provide the secure base and have a great ability to grow, if assistance is at hand.

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Matt Wood (05 Jan 2012)

What a load of rubbish - in my humble opinion!

There are two interellated things going on at the moment.

1. Many of the new businesses have started because the private sector and public sector have been shedding jobs and ex-employees have decided to be pro-active about creating a future for themselves and families. The government is not setting this trend or pushing people to take this route, it is just supporting those people who have made the decision to be a creative part of the economy. Of course not all will succeed but from many acorns will oaks grow - it has always been such in a recession.

2. However, this is part of a wider trend of crowd-sourcing, contracting, out-sourcing, sub-contracted manufacturing, off-shoring, on-shoring, project based employment that is only going to continue. Large companies and public sector organisations, with rows of desks and cubicles full of people are a thing of the past. The work will get done and services delivered, but the method of delivery is changing in the private sector and needs to change faster in the public sector.

Every year is enterpise year in the private sector, but it has to be good thing that the government is acknowledging the contribution we are making, and also thinking creatively about how they can best help.

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Emma Jones (05 Jan 2012)

My goodness ... I was having a good start to the year until I read this. Come on, Cobweb - let's cheer up and encourage people to start businesses! I have been operating in the small business market for 12 years and have never seen so many great businesses being started and so much quality support available. Let's have a year of celebrating that and the economy will do well.

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Barry Harvey (05 Jan 2012)

I understand what the government is trying to do, but it is, as you say, misguided and ill-thought.

We need to be more independent as a nation, which means reducing the trade defecit, increasing our manufacturing and replacing our reliance on oil and gas.

The technology required for sustainable energy could both improve our manufacturing and make us more self-sufficient. It is areas like this that the government should be looking at.

This would also have the benefit of reducing our reliance on the income generated by the financial sector and create a better balanced economy.

And yes, we need more knowledge and training to keep current employers in business, not let any tom, dick and harry with a flaky idea jump aboard the 'enterprise' bandwagon.

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Mervyn Pilley (05 Jan 2012)

Well said. I totally agree with everything your article says. The rhetoric from Mark Prisk, who as a Minister who run his own business, should know better is like many things this Government have said,focusing on headline grabbing statements as opposed to reality. Getting rid of Business Link services and trying to replave it with volunteer unpaid mentors is not working. Unrealistic Self employment is being used to massage the true unemployment figures. A National disgrace

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