3 Suggestions to Accelerate Start-up Businesses in Scotland
Do you know what size of businesses in the UK account for: 99.3% of all private sector businesses? 48% of private sector employment? And a third of of private sector turnover?
We’ll give you a clue, it’s not the corporates or “businesses of scale” – it’s small businesses! Small businesses with between 0 – 49 employees. It’s a fact, small businesses ARE the lifeblood of our economy (more info in the Government’s Business Population Estimates 2015 report here).
I’m sure you’ve heard our politicians say this on more than one occasion, why then do they constantly overlook small businesses, both in Holyrood and in Westminster?
“Ordinary” Small Businesses Overlooked By the Government
Thankfully, we are not alone in our frustration at this issue. The Federation of Small Businesses, drew attention to this in 2008, with their, “Small Business, Big Employers, Good Employers” report and it appears that, sadly, little has changed in the seven years since then:
“With spiralling unemployment and recession in the UK the importance of small businesses is coming into play. Areas with a number of smaller employers are more economically resilient than areas that rely on one large employer. For years however Government has ignored this vital sector”.
Before we go any further, let me clarify my position here: a mix of micro, small, medium and large businesses is crucial to a sustainable economy. We certainly need to have a combination of all of these and it may be true that Scotland, in particular, really does need more “businesses of scale”. However, this shouldn’t be the sole focus for the Government and business support agencies in Scotland.
We’ve touched on this in a previous blog, however, I wanted to write a whole piece on this issue because we’re extremely passionate about this and if left unbalanced, this mindset could cause real damage.
Whilst others claim that they exist to help start-up and small businesses and whisper their support; we set up Acorn Enterprise to educate and accelerate new businesses. Therefore, we are going to shout: WE LOVE START-UPS!
We’re on a mission to grow Scotland’s start-up business culture, by creating a sustainable movement that will lead to a fundamental change in attitude and behaviour.
Businesses of Scale Shouldn’t Be the Sole Focus!
In 2015, being an “entrepreneur” or having a start-up is seen as “cool”, “sexy” and, hopefully, as a more viable career move – this is great! A real achievement that everyone involved in supporting new and growing businesses can be extremely proud of.
We’ve previously applauded the role of the Scottish Government in tackling this issue head-on, through the Scottish EDGE Fund, the Scotland CAN DO Framework and other initiatives, but also warned that the focus shouldn’t just be on, “businesses of scale” or these “all or nothing” businesses.
As I mentioned right at the start of this blog, 99.3% of these businesses are not “businesses of scale”. Yes, Scottish companies should be exporting more and yes we need to dream big, however, let’s not put all our eggs in this “all or nothing” basket.
At one extreme, if all the conversation is about “businesses of scale”, it will certainly inspire some people to launch one and aspire to trade on a global basis, however, it will also deter others.
What About Sustainable, Local Small Businesses?
It really is a self-selection bias, that favours the so-called “brave”, whilst deterring the ordinary person with a business idea, that may not be a global phenomenon but will be a sustainable business, providing employment, economic stability and diversity. Some people may want to have a business with 10 employees and actually, that’s great! We’re here to ensure your new business grows and thrives.
How many people have new business ideas but do nothing about them? How many ideas are prematurely shot down before they have a chance to gain traction? How many people are put off launching a new business because “it’s JUST a hairdresser’s”?
It’s sheer arrogance and borderline discrimination to discount people with such ambitions! Just because they don’t want to create the next Google, Skyscanner or Fan Duel (the latter two are both Scottish companies, valued at $1 Billion).
In our experience, self-confidence kills more new businesses than the market place does.
The Gap in the Scottish Business Ecosystem
Before we move on to outlining 3 suggestions, I’d like to finish by saying that we understand the scale (oh dear, that word again!) of the issue is huge: there are lots of people looking to launch a new business in Scotland, and despite there being numerous business support agencies, they cannot possibly help everyone, due to limited resources – Acorn Enterprise is no different.
Whilst other agencies do a fantastic job of inspiring more Students, Graduates and non-academic individuals to launch their own business, there is still an obvious gap in the existing provision: where do these fired-up individuals go to take their business to the next level, to learn the practicalties of starting and running a new business – particularly, if they don’t want to grow a “business of scale”?!
The particular issue we are tackling is educating and accelerating start-up businesses, from both the non-academic sphere and those in Further and Higher education.
3 Suggestions to Accelerate Start-up Businesses in Scotland:
I’m of the opinion that there’s no point criticising if you don’t do so in a constructive manner, therefore, here are 3 suggestions to remedy the situation:
1. A Mentor for Every Start-up Business Owner
The importance of having a business mentor cannot be overemphasised, particularly when you’re starting out. Ideally, this is a local successful business owner, who provides accountability, acts as a sounding board and prevents you from making the same mistakes they made.
Every start-up business owner should be matched with a mentor, not just those that have a certain turnover, operate in a specific industry or are in a certain geographic location. We know first-hand that it can be challenging to recruit mentors, however, a lot of business owners are only to willing to give back by lending a hand to the next generation of business owners.
It’s not an overnight solution but something to work towards: a Scotland-wide business mentoring service for all start-up businesses. I’m not suggestion this necessarily has to be free and could even be set-up as a charity or social enterprise – if you’re reading this and want to launch your own business but are struggling with an idea, this is a real opportunity for you to make a significant impact to new business owners in Scotland!
2. One extra SME employee would eradicate UK unemployment!
Apart from a handful of schemes, the majority of financial assistance relating to taking on new employees seems to be reserved for big companies or “businesses of scale”.
Think about it this way, if each small business in the UK was given some financial assistance to recruit an extra member of staff, it would completely eradicate unemployment!
Now I realise this could be an enormous up-front cost to the Treasury but like any investment, it should realise real returns: more people paying taxes, more people spending money and less people seeking welfare.
3. A relevant, joined-up approach to accelerating start-ups in Scotland
Entrepreneurial Spark seem to do a great job of helping business owners go from an idea to investor ready in about 5 months, however, they are not for everyone – other Business Accelerators are available!
However, it appears that unless you’re looking for investment, creating a hi-tech business or operate in the creative space, there isn’t an Accelerator for you. Why is there not a Business Accelerator for small businesses, who may not want to take over the world but want to build a sustainable, local business that may employ say 10 people?
Acorn Enterprise fills this void because that is what we do. We run 20 week Business Accelerator Programmes for “ordinary” people, who want to create extraordinary businesses – not necessarily massive “businesses of scale”.
Additionally, Business Gateway also appear to do a fantastic job of advising new and growing businesses and we add value to their offering by providing an intensive and structured 20 week Business Accelerator Programme, for a limited number of selected business owners that provides these new business owners with the confidence, clarity and business skills to grow a sustainable business.
However, we’re not saying that this should be the only approach, as an extreme that only focuses on supporting “ordinary” start-ups and small businesses is no better than one that only focuses on “businesses of scale”. We need a balanced approach to accelerating new businesses in Scotland.