Small Talk: A seat at the top table for small entrepreneurs would help to stop muddle and inconsistency in Whitehall

 

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The Independent Online

With barely a breath taken following Scotland’s independence referendum, policymakers have rushed headlong into party conference season, pursued smartly by every pressure group imaginable. The Federation of Small Business (FSB) is no exception – today it publishes its manifesto for the small business sector – and deserves a fair hearing if this government and its successors are serious about putting entrepreneurialism at the centre of economic recovery and growth.

The FSB’s manifesto contains all sorts of useful suggestions, from calls for better broadband to a crackdown on late payments, but one recommendation in particular will strike a chord with small businesses frustrated by the repeated failure of governments past and present to take their concerns seriously. Why, the FSB asks, does the UK not have an equivalent of the US Small Business Administration, an agency that sits within government, with a cabinet seat, in order to bring small business policymaking under a single roof?

Governments all too often fail small businesses, even where they have the best of intentions. Given the way we set policy in the UK, with initiatives aimed at a single constituency as likely to come from any one of several government departments, it’s no wonder that the overall environment lacks coherency or consistency.

In the Coalition Government, the Department for Business, under Vince Cable, often finding itself with a different position to George Osborne’s Treasury. These disagreements have often slowed or blunted policy responses to small businesses’ problems.

This is not to say that a UK version of the Small Business Administration would have the final say on any measure affecting small businesses. But an agency like this could ensure that policy across all departments is consistent, and it would be a voice for small business within government.

So, for example, every government department talks big on procuring more goods and services from smaller businesses, but with no one to hold them to account, they rarely put their money where their mouth is. Similarly, while the Department of Business says it is determined to encourage entrepreneurialism, the support network that once existed for growing businesses has suffered at the hands of Treasury cuts.

The list of instances where small businesses’ lack of representation at the highest level has cost them dear is almost endless. Indeed, you can see it in the rest of the FSB’s manifesto – the lack of action on broadband access and late payments, for example, are symptomatic of a general unwillingness to take on vested interests and larger businesses on behalf of smaller firms.

Another central part of the role of the Small Business Administration in the US could be just as important in the UK. Although we finally have the British Business Bank, a government-backed institution that aims to ease the interaction between small businesses and the financial markets, the UK is the only member of the G8 that doesn’t have a state-backed investment institution. A Small Business Administration equivalent would play that role.

Will the FSB’s campaign get a fair hearing in Westminster? Well, the Labour Party has already signed up to a manifesto commitment to introduce some sort of agency along the lines that the FSB is suggesting, though the detail is not yet clear. The Conservatives, meanwhile, have naturally invested heavily in the structures put in place by the current government, and have not, to date, been so supportive.

Still, this is a reform we badly need. It has become accepted wisdom that it must be small businesses that drive sustainable economic growth, yet these firms do not currently have a seat at the highest level of government. This is what is required if they are to fight for what they need to deliver that growth.

Tent maker pitches for funds to expand

A camping equipment maker backed by the joint founder of the jewellery firm Links of London is raising funding to expand, writes Laura Chesters. FieldCandy, founded in 2012, hopes to raise £300,000 via the Enterprise Investment Scheme.

The brand, founded by John Harris, is sold in Harrods and will soon be sold in Liberty. The funding will be used to expand the product range and develop distribution.

Field Candy’s chairman, John Ayton, who was joint founder of Links of London, says: “The company has the potential to develop into a fully international outdoor lifestyle brand with its iconic tents as part of a range including everything from sunshades and picnic mats to windbreaks and hammocks.”

Crowdfunding services lend £2bn

Peer-to-peer lenders have passed the £2bn mark,  according to the analyst AltFi Data. It says crowdfunding platforms such as Zopa, Funding Circle and Ratesetter have now lent £2.04bn to individuals and small businesses.

Giles Andrews, founder of Zopa, said the sector had reached critical mass. “This has been achieved by consumers who are willing to think outside the banks,” he said. “What started out 10 years ago as an idea in a barn with Zopa is now one of the most innovative and disruptive industries in the world.”

Small Business Person of the Week: Jon-Paul Hanrahan, Co-founder, Douglas Scott Legal Recruitment

“I launched the business in 2004 with my co-founder Kathryn Riley. We had been working in the recruitment sector in Manchester and we really felt like there was an opportunity in the legal recruitment market – no one else seemed to be serving the private practice law firms in the North-west.

“In retrospect, we only managed to get the business off the ground with the naivety of youth. We gave up our jobs, agreed to go without a salary for a few months and launched the business without any funding from the banks – not even an overdraft. I don’t know whether we would be so brave today, but we realised quite quickly that we had hit on a sustainable business idea.

“Certainly, those first few years were very tough, but the flexible infrastructure we built then set us up very well for growth.

“That served us well during the recession when we were able to expand our market share. Today we’re still growing – we have sales of £2.5m a year – and we’re ambitious. We have an office in London too now and we opened our first international office this year, in the Middle East.

“At the same time, we work really hard to stay  true to the values we had when we started.

“In particular, we aspire to the concept of ‘arbejdsglaede’ – it’s a Scandinavian word meaning happiness at work. We think happy workers make productive workers.”

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