Why England Needs a Start-Up Ecosystem & Policies?

In this blog, I will play the role of the Shadow Minister of the B….ing Obvious (BO), and you will play an Incredulous Mainstream Media Journalist (IJ) asking the questions:

The interview begins…

IJ: This year will see record startups in Britain – why do we need an ecosystem and policies?

BO: Every year for decades has seen record start-ups, but that’s because it is cheap, quick and easy to register a new business. Half of all working adults want to start their own business. Most new businesses registered, including from abroad, are speculative – they might start up one day. Most start-ups never trade, and of those that do trade, most don’t last very long. Hundreds of thousands are shelved within weeks of registration, and even with existing limited companies, nearly a fifth are dormant.

IJ: Does that matter?

BO: The consequences of failing – loss of jobs, debt and depression – are seriously bad for the country, whereas 80% of startups still trading after three years is seriously good for the country. 80% of startups still trading after three years has been proven to be attainable, but it needs an ecosystem of support and a few micro-business friendly Government policies.

IJ: Why do so many fail?

BO: No advice or bad advice. Also, they borrowed at the beginning rather than bootstrapping, didn’t test trade, didn’t get help from a business owner that understood their customers, didn’t build multiple income streams and weren’t doing something they loved doing and were good at.

IJ: What’s the main effect of “no advice” or “bad advice”?

BO: People start a business before they’re ready or don’t stand a chance of succeeding or can’t earn enough. It’s like any career choice; you need good advice to be confident that you can earn your living doing that work. The fastest way of improving the survival rate is for people not to start before they’re sure of viability, to test trade first while they have another job or income or to grow a side hustle. I know highly successful business owners who took over two years to start the right business.

IJ: But surely, out of a million startups in a year, the Government and Investors will find some to scale up to unicorns (£billion)?

BO: That’s what we call the “Silicon Valley” or “Picking Winners” approach. It doesn’t work – only one in ten new businesses in Silicon Valley will survive over three years, and no one knows which will be the ONE. That’s OK for Investors as a 1 in-10 success rate is a good gamble, but it’s a lousy return for countries, regions, local communities and all the individuals that fail. Government and Investors didn’t “pick” and scale a Charlie Mullins OBE (plumbing), Lord Sugar (electronics), Sir Jim Ratcliffe (chemical engineering), Kanya King CBE (music industry), Antony Chesworth (online shops), and so forth. In fact, all of these multi-millionaire and billionaire entrepreneurs preciously guard their independence from the government and investors. Government can help by providing the right environment to start and grow – nothing more.

IJ: So, you’re not in favour of the government selecting and helping to grow scaleable businesses?

BO: Correct. Ask the Government what the return has been on the £billions it has invested in hi-tech, hi-growth startups and ask the Business Bank what its return is on the £billions it has provided in Start Up Loans and what proportion of start-up owners struggle to repay the loans or default. There is Another Way, as we explain in “The Happipreneur”.

IJ: What is the other way?

BO: This other way means providing quality, practical support and a level playing field to all startups – everyone that is thinking of starting a business and for at least eighteen months from startup. Schemes, initiatives, and programmes come and go, but an ecosystem lasts forever. Starting and succeeding in your own business becomes normal, and at least 5% of the vastly increased number of successful startups will provide good new jobs, economic growth, innovation, exports and so forth that the government wants to see.

IJ: Surely no Government can afford that?

BO: Most Governments worldwide will say they can’t afford NOT to support all micro-businesses (0-9 employees), and all startups are micro businesses. It’s normal. It’s a private-sector and public-sector collaboration which benefits everyone. It is far less expensive for governments than the scaleup agenda and, after a few years, costs very little indeed. It’s a fabulous return on initial investment. For example, a start-up ecosystem is normal in countries like New Zealand, Canada, Scandinavian countries, Germany, Malta and Scotland. It means more great new jobs, economic growth, innovation, and greater sustainability. It’s wonderful for our environment, high streets and communities. It means millions of happipreneurs in England.

IJ: Like entrepreneurial America?

BO: Definitely not. The USA always languishes way down the league table of micro-business-friendly countries and best places to start your own business. The startup policy and support best practices are much closer to home. See what Micro Business Alliance members Becky Lodge of StartUp Disruptors in Portsmouth, Charles Cracknell of Hull City Council and Jenn Crowther of Yorkshire in Business are doing every day of the week for startups in their area. As for a country, England hasn’t had a Startup policy and nationwide support programme since 2004, but Scotland has had one for decades through Scottish Enterprise and Business Gateway. It works.

IJ: How do you know it works?

BO: I open my eyes and ask questions. If anyone wants to start a business in Scotland, they know to click on the Business Gateway website and find the contact details of their local office, which they can even visit, many are on the High street, to get high-quality initial advice and be signposted to the next destinations in their startup journey. The website is a joy to behold too, with free webinars and networking opportunities for all the things you need to learn about as a prospective and existing business owner. You’re brilliantly supported in remote locations like in the Highlands and Islands; I know I’ve visited these support advisers and talked to the startups too. As a result, the survival and growth rates are fabulous.

IJ: So what do you want national, regional and local government to do to improve England’s start-up survival and growth rates?

BO: Here’s a starter of ten:

1. Stop all the existing funded schemes, initiatives, programmes, consultation and research programmes.
2. Help us build a grassroots upward, private sector-led ecosystem of start-up support.
3. For every town and city in England, help us to find the existing organisation(s) providing high-quality start-up support to hundreds of startups each year.
4. Help us to develop these organisations as a national network, operating to agreed standards and signposting to accredited specialists and business owners in their town or city.
5. Match fund with us the initial national website to the quality of Business Gateway in Scotland and match fund the first year’s publicity in schools, colleges, universities, libraries, local councils, information sources, business support professionals such as accountants, bookkeepers and digital marketing agencies AND b2b platforms such as LinkedIn, Amazon, Etsy etc.
6. Fund a new National Enterprise Allowance Scheme to start after test trading and continue for 18 months.
7. Treat all startups and micro businesses (95% of all businesses) in their first eighteen months of trading. as a priority group for government influencing of cost reduction. These cost-reducing measures would be offered to the start-up by the approved business support provider in their town or city. For example, self-certification could be used to reduce the cost of regulatory compliance. The largest companies could offer reduced-cost utility bills, accounting software, e-shop design, broadband, comms, travel etc.
8. Education policy can be amended so that students at all schools, colleges and universities can learn and develop the Big 13 Enterprise Skills and consider running their own business a positive career choice. An enterprise educator (existing teachers and lecturers) should be appointed for every school/college and university, and the network of these should be integrated into the overall startup ecosystem.
9. Of the vital 3 Cs to a startup of Customers, Costs and Cashflow, then Government and its agencies should have no role in policymaking for winning more customers and business growth but can be influential in its policymaking to ensure that the basic business costs will be minimised and that all invoices will be #PayIn30Days or less.
10. Extend the remit and role of the Small Business Commissioner. to that which we have recommended and allow her direct access to the Prime Minister.