It may not always feel like it, but entrepreneurs in London have it easy. The network of support available to us here in the capital is amongst the best in the world – from top accelerators like Tech Stars or Level 39, to incubators including Entrepreneur First and Launch 22, to co-working spaces like Central Working or WeWork, there are resources available to every founder, no matter the scope of their ambition, and further up the food chain, VCs such as Notion Capital and Hoxton Ventures are ready to inject funds when the time is right.
But what if you’re a founder starting out in Gloucester or Cornwall; or an entrepreneur dreaming big in Stockport or Sunderland? You might find things aren’t so easy – where do you go to discuss your business with like-minded founders? Who do you turn to when times get challenging?
Baroness Mone, born in Glasgow, left school at 15 to become a model. She then became Head of Marketing in Scotland before being asked to step down after it was discovered she had embellished her CV. She switched tack, becoming a serial entrepreneur and founding legendary lingerie company Ultimo, and fake tanning company UTan.
She has had her fair share of ups and downs; setting up MJM International, Ultimo’s parent company with a loan of just £5,000, she nearly became bankrupt before rebranding as Ultimo brands, reducing her stake and ultimately resigning her directorships in both vehicles to take on a role in parliament as a member of the House of Lords.
A resilient character, who knows what it takes to succeed in unforgiving circumstances, Mone was tasked to lead a government review into entrepreneurship and small businesses in August 2015, and has just delivered her report.
What can we learn from it?
- Firstly, the New Enterprise Allowance scheme is in need of reform – the scheme was set up by the Department for Work and Pensions to allow unemployed people to set up businesses without having to complete job searches to claim out of work benefits. Instead they become eligible to receive grants of up to £1,274 paid out over a six-month period. The scheme has helped kick-start over 76,000 businesses founded by 152,000 individuals.
- Mone proposes that a Strategic Enterprise Oversight Group be created to ensure that the diverse organisations involved in enterprise support align their services to provide more effective support to entrepreneurs, and that the NEA’s “payment by results structure” be reinforced so that new businesses are encouraged to increase earning above the “Minimum Income Floor” which applies to self-employed people for their first 12 months in business.
- Enterprise support away from London has been largely devolved into LEPs (local Enterprise Partnerships) which provide “Growth Hubs” – but more could be done to identify and provide mentoring to companies that show significant promise – not just to owner/manager microbusinesses.
- School leaders, Local Authorities and the Department for Education should be encouraged to adopt more innovative approaches to enterprise education – investigating and incorporating best practices.
- Banks are applauded for their contribution to helping small businesses across the UK grow, reducing the administrative and financial burdens founders face – examples include the “Entrepreneurial Spark” enterprise hubs provided by RBS – but more can be done – Mone says. She plans to work with HSBC to identify locations which can pilot a scheme, and create a network of enterprise hubs across the UK.
It’s sad to read that an investigation conducted across social media as part of the review revealed that loneliness, lack of confidence, income insecurity and not knowing where to turn for support and advice were 4 of the major reasons cited for the poorest regions in the UK also containing the fewest entrepreneurs.
It goes to show that entrepreneurs are an invaluable part of the country’s economic infrastructure, providing not just employment and access to opportunity and training but at a more basic level, hope, encouragement and talent spotting.
In the corridors of Whitehall and at the mayoral HQ in City Hall, people discuss Unicorns, lean, agile business models, Silicon Valley and super-charged growth. To some of Britain’s poorest regions, they might as well be speaking in Clingon. Perhaps what’s needed is for the devolved regions of Scotland and Wales to take real steps to fire entrepreneur’s imaginations and help them understand that they will listen to ideas, back them, and even fund them, with or without London’s lead.
The latest statistics show that 15,620 businesses started from 36,470 mentoring starts for the period from October 2014 to September 2015, a significant drop from the previous year – (24k from 44k). Mentoring is falling but the number of new businesses being created if falling faster. Lack of appropriate childcare is another issue cited by the report that discourages “wantrepreneurs”.
There are more reasons to be fearful than cheerful, this snapshot suggests – is it time to let go of the theory that the streets of London and the South of England are paved with gold, and start putting something back into the communities that nurtured so many of these regions latest and greatest business people?
It’s important to know where you’re going in life, but just as important to remember where you came from – and that your community will always need you. Are Starting up and putting back really mutually exclusive?