It’s a rare thing, in my experience, for politicians to have sensible things to say about encouraging entrepreneurship, especially among people from disadvantaged backgrounds who can’t go to friends or family to help them get going.
Yet the other day one of them suggested that what Britain needs is a “National Investment Bank” and it struck me as an idea having great appeal.
Whatever banks may say, I can’t see any evidence that they are backing start-ups as they used to. In 2000, NatWest lent me £1m to open my first restaurant, the Cinnamon Club: no guarantees, no charge on any lease, 2 per cent above base. The manager believed in the project and my team’s ability to deliver and in turn gave my investors confidence that they were doing the right thing in backing us.
When I tell the various young aspirant business people I meet about those halcyon days their jaws drop, because although the businesses I have created since then have generated more than £100m in revenue and around £10m in profits, and created jobs for thousands of people, there are banks that wouldn’t be able to lend me £1 right now – so what chance would these young hopefuls have?
The Start Up Loans Company offers up to £25,000, which is fine if you have modest ambitions or a low-level cost plan – for a nail shop or a food cart, for example – but who is backing the meatier visions that could trigger economic growth, create jobs and put money back into the public purse?
Not every business seeking backing is worthy of it, but many compelling plans could be brought to life – especially if they had mentoring schemes attached to them.
Although I knew many restaurateurs at the time, I never thought to ask them for advice when setting up the Cinnamon Club. The term mentor just wasn’t around in those days. If it had been I would not have made some of the mistakes I did (most laughably not knowing it was my job to order the gas – so we had a launch party for 600 guests where the kitchen was driven by canisters we managed to hire and wheel in on the day). Businesses could do with more peer advice because no bank manager I have come across has ever offered me any.
The idea of a National Investment Bank was first mooted by the economist Robert Skidelsky four years ago. Properly conducted, it could give backbone to otherwise largely empty words from politicians who say they want to see entrepreneurship thrive.
We’re great at making successful businesses more successful. The Business Growth Fund is a government-inspired initiative backed by five banks and they have billions of pounds to back you – so long as you have already proved that your business has scalability.
Michelle Mone, the businesswoman and newly appointed Conservative peer, has been recruited by the Prime Minister to go around the country encouraging people from difficult backgrounds to consider self-employment as a life away from unemployment.
I hope she is successful, but that talk needs tools to back it up. There are many ways such a fund could be financed if there were a real will to collaborate between aspirant entrepreneurs, businesses willing to mentor them and a real bank with real commitments backed up with real money.
By not backing entrepreneurial talent we are wasting opportunities daily and we must seek counsel more widely than we usually do on such matters.
After all, the politician who raised the prospect for such a bank was the allegedly “anti-business” Jeremy Corbyn.
Iqbal Wahhab is the founder of the Cinnamon Club and Roast restaurants in LondonReuse content