The wheels on the enterprise bus

May 31st, 2012

The last week has seen the latest announcements relating to the publicly funded business support that is now available across the country.

The first was the announcement of the Growth Accelerator initiative which claims it will support 26,000 firms with high-growth potential. This was quickly followed by the launch of the Start Up Loans scheme for young people and Lord Young’s ‘Make Business Your Business’ report on enterprise.

Lord Young is Enterprise Adviser to the Prime Minister and he claims that this is the first comprehensive report into small and medium-sized enterprises since 1971.

That being the case the 50-odd page report takes about five minutes to read and ‘reveals’ how many small and medium-sized firms there are in the country and how important enterprise and entrepreneurship is to the economy, and lists the extent of the support which is now available from Government, such as the new Start Up Loans and some “brand new” Business Link guides to ‘home based business’ and ‘taking on an employee’.

Some of Lord Young’s 40-year insights into entrepreneurship include the following extracts from his report:

Easily said and easily done – 3 good reasons to start up a business today.

  • Low start up costs – most businesses now start up on a bootstrap budget for less than £100. With a smartphone and business card in hand you can make sales and set up operations with ease and at home.
  • Enabling technology – social media platforms and trading sites offer start ups a powerful route to market. Selling and promoting yourself online is affordable and achievable and successful businesses are being built on Facebook and promoted via Twitter, YouTube and LinkedIn.
  • High level of support – there has never been so much support available to start ups and growing businesses, from the Government, the private sector and from peers. Campaigns such as StartUp Britain and Business in You shine a spotlight on this support.

(Source: Report Appendix ‘A Guide to Starting and Developing a New Business’)

The report makes several mentions of the Mentorsme/Get Mentoring initiative and the Business Link website, particularly with reference to using its Finance Finder and Business Support Finder tools.

Chuka Umunna MP, Labour’s Shadow Business Secretary, was far from convinced when he commented ahead of the announcement of the Start Up Loans and Lord Young’s report. He said:

“Since Lord Young told us we had ‘never had it so good’ in 2010, the UK economy has shrunk by 0.4%, we’ve been tipped into a double dip recession and the UK has slipped from 4th to 7th in the World Bank’s Ease of Doing Business rankings”

“The Government has made life more difficult for start ups by dismantling the Regional Development Agencies and other business support which existed under Labour without a proper replacement or transition plan. The Business Link website is no longer being updated, the Government’s mentoring scheme has fallen far short of the numbers initially promised, and the LEPs have not been given the resources to meet their full potential, limiting the amount of support which is available for those wanting to start their own business.”

What is most striking in Lord Young’s report is the extent to which the Department for Business (BIS) has gone in placing its business support eggs in the social media/online basket.

This is despite the latest figures from BIS’s own small business barometer survey which reports that less than 5% of firms have used the Business Link website to search for finance options and less than 1% have accessed the My New Business section of the site. The site’s Finance Finder tool primarily only provides details of various loan facilities available from banks or sources of finance which start ups and the smallest of firms are ineligible to access. And there are hundreds of useful funding sources missing from the directory altogether.

The website’s Business Support Finder tool, for some reason, only lists a fraction of the publicly funded support available and misses out on the extensive variety of support schemes available from non-public sources around the UK.

Without question Chuka Umunna is quite correct to say that the Business Link website is no longer being updated.

With regard to the highly-plugged Business In You initiative only 2% of small firms surveyed were aware of its existence and less than 1% have ever visited the website.

Despite this, the Government and BIS certainly appear to believe in their own hype and seem determined to continue down the online support path for the remainder of this five-year term.

Whether you are a prospective start up, a small business owner or an adviser, you are entitled to make your own mind up. To help you do this have a look at the following links to the business support services which Lord Young and our ministers have decided that we need, but which may also provide useful clues as to why they are being ignored.

The Financial Mentoring Masterclass video is an example of what the Mentorsme initiative has to offer.

The first page of the Business Support Finder tool on the Business Link website has some strange results… support from a Santander overdraft or vehicle contract hire?

StartUp Britain’s bus could be an example of Lord Young’s “High level of support” available to start ups. Run the video to see it.

Whether these examples of ‘support’ inspire you or make you cringe, what’s clear is that after 40 years the wheels on the enterprise bus go round and round, round and round…

To comment on this article you can do so below.

4 responses to “The wheels on the enterprise bus”

  1. Carole Gallant says:

    There seems to be a lot of support and funding if you are 18 toi 24.

    I am 55 and have a strong track record in running businesses. I want to start up a new business. I cannot get a loan – too old. I cannot extend my mortgage – too old and these are risking my own capital which at 55 is a little risky even for me.

    There is nothing for the over 40 year old middle manager who has lost his job and wants to start his own business/enterprise.

    The informaiton and support for people of mature years is appalling – so I think I might have to do something about it.

    Come on someone!

  2. Paul Davies says:

    Raising finance for your business idea is important but it’s not the only thing that’s missing now that the government has washed its hands of new business support. Most business start-ups have no real idea about whether their idea is viable, due to lack of a Strategic Plan and in particular a sound, detailed Financial Forecast.

    Up until the end of last year I was coaching up to 100 would-be entrepreneurs per month in the basics of forecasting and monitoring finances in small businesses. This was under the Regional Development Agency’s Intensive Start-up Support Scheme, now dismantled. The programme was flawed, and the management wasn’t brilliant, but at least it was funded, and it provided much-needed advice and support for people who, in the main, had no real business experience or know-how. In a series of carefully planned 3-hour workshops, we were able to force these business newbies to address real issues like “Am I going to make any money?” and “Can my family and I survive if I go into this venture?”.

    Most often, start-ups just plunge in without any real understanding of whether the business idea is viable, and the appalling business failure rates confirm how dangerous this is. Official ONS government statistics say that 30% of all businesses fail within three years. But they only track VAT-registered businesses, and most start-ups never register, many because they cease to trade very quickly. I estimate, on the basis of five years involvement in start-up support, that as many as 75% of start-ups gently fade away before they even show on the government’s radar. What a colossal waste of time, money and effort!

    The greatest value in any properly-run start-up support scheme is to make people address the vital issues of survival, and to ensure that the business, if it goes ahead, is properly structured, financed and managed. In the programme I worked on, out of roughly one thousand people coming forward for business support each year, two thirds gave up on the idea when they were forced to examine in detail the financial realities. The balance of three hundred or so actually started trading, and about half of these kept going for any length of time. And that was with a well-structured support programme in place! Presumably now that the support level is pretty much zero in my area, all of the 1000 will go ahead, and an even smaller number will succeed. It’s nonsense, and BIS need to address this issue immediately. Every year that goes by without a properly funded start-up support programme in place is actually costing the country millions and leading tens of thousands of nice people into misery through starting businesses which, without proper support and advice, are doomed to fail.

  3. Steve Munden says:

    The government ‘support schemes’ and the public sector will never truly understand the private sector. The public sector gets taxpayers money regardless of whether it does a good job or not. This is not true of private sector businesses who would inevitably fail if they continually provide bad products or services. I find it very hard to take seriously an advisor who has never run a real business in his life – and probably never will.

  4. Neil Davey says:

    I don’t think Chuka Umunna can crow too loudly on this subject, being a member of the last party in government that presided over the demise of the local enterprise agencies under a Chancellor who told us he had initiated a ‘great deal of business support’. I suppose if you were in a position to benefit from some obscure tax breaks this may be true but not if you were a new small start up. At least Chuka has articulated what we have all been discussing for some time, surely a first for anyone involved in Parliament!

    I agree with Carole; true support for those over 30 is difficult and for 50+ even more so. The programme I am involved in deals with all age groups of all capabilities so we can help in overcoming many of these problems but finance is a major sticking point. I can only agree with Paul about the lack of properly funded start up support schemes and this is what BIS needs to be addressing instead of spending vast sums on the Business Link website. The evidence of our programme shows a huge demand for the right type of support and training, but we are in the minority, great swathes of the country have no access to any form of support if they wish to start a business and its pointless BIS proclaiming differently; a website is no substitute for 1-2-1 meetings with an advisor together with well structured business training. But this is old ground now and its obvious that BIS are not listening.

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