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Talk about a love-in. Anyone who’s anyone in UK enterprise was there - and then some. David Cameron’s giving a speech? You’re kidding, right?
And not only Cameron (as if his presence weren’t impressive enough). We also had George Osborne hinting at new policies for small investors, Vince Cable making cutting asides about the banks, Peter Jones speechifying sincerely, Duncan Bannatyne growling tongue-in-cheek.
So, you could say the launch of StartUp Britain was a fairly high-profile affair. Always a risk, that. It was slick, it was glossy, it had inspirational music and clever sloganeering (“by entrepreneurs for entrepreneurs”, “itunes for entrepreneurs”, etc). There was a fair bit of hype, to say the least.
But beneath the marketing gloss, what have we actually got? You can read the detail elsewhere, but basically we have a web portal linking to existing start-up resources; we have corporate offers for small businesses, many of which are already available elsewhere; we have the promotion of enterprise education, most of which was already happening; and we have the start of a mentoring system which aims to put business owners in contact with each other (this is new, but hardly an original idea).
Reading between the lines, it looks a lot like the Government has looked at StartUp America (launched three weeks ago), said “We need some of that” and approached a few of the entrepreneurs who carry most influence with small businesses. The conversation probably went something like this:
Government stooge: “Dave wants to launch StartUp Britain.”
Enterprise campaigner: “Great – we’re up for that. When? July time maybe?”
Government stooge: “No.”
Enterprise campaigner: “Ok, June then. I expect we could get something decent together by June.”
Government stooge: “Er, no. March.”
Enterprise campaigner: “But it’s already March.”
Government stooge: “Yeah.”
Enterprise campaigner: “Oh. Right.”
The whole thing has been pulled together in about three weeks by a small group of exceptional people, quite possibly to a schedule set by the Government. Yes, it’s far from perfect, but it’s out there now and it’s just the start of something. The PM and his chums will likely now move on to the next publicity opportunity (they’ve not actually put any money into this); meanwhile, the founders will have to make something more of what they’ve started. Believe me, these are not the sort of people who will want to let an opportunity like this go.
The thing is, StartUp Britain is actually something we need. In the last few years, a huge number of small business resources have sprung up online (Donuts included); how the hell are prospective business owners supposed to know what’s worth looking at? Until now, they’ve only really had Business Link serving this kind of function in a systematic way, and Business Link has always been very conservative about its recommendations (with good reason). StartUp Britain doesn’t have to be - if it’s the most useful resource, it should get on the portal. How you decide what is ‘most useful’ is a different matter.
Of course, there are plenty of gaps - we’d like to see more focus on helping people get to grips with the technical and legal aspects of setting up and running a business, for example (Law Donut, anyone?). But it’s a start, and the founders themselves admit they’re only “two per cent” of the way there.
Perhaps it was launched prematurely - but, hey, it’s been done in true fly-by-the-seat-of-your-pants entrepreneurial spirit, and the people behind it should be given a high five for just going for it. This is something “by entrepreneurs for entrepreneurs”, after all, so let’s support StartUp Britain and help to turn it into something genuinely helpful to small-business owners. I haven’t even mentioned the potential lobbying power of this group of people (it’s considerable) - in fact, it's in the unified campaigning for enterprise education where StartUp Britain might have the biggest impact. This is an opportunity for the UK’s enterprise community - let’s take it.
Do you suppose they’re going to remove David Cameron’s giant disembodied head from the home page now they’ve launched?
Two irritations - the language of enterprise and navel-gazing by the media
One thing that annoys me whenever I go to small-business events is the readiness with which everyone talks about ‘enterprise’ and ‘entrepreneurship’. On the one hand, they discuss the ‘fear factor’ of starting a business and how we can help people overcome it; on the other, they use the very terminology that puts people off in the first place. How many ordinary small-business owners associate themselves with the qualities of a ‘classic’ entrepreneur? Not many, I bet.
My concern is that by indulging the fantasy that everyone can be a restless, risk-taking, dynamic wealth-generator who starts another business - sorry, enterprise - with every million made, we distance ourselves from the reality of what it’s like to actually start and run a small business. It’s just one more step from this to Government business policies that offer a disproportionate benefit to a niche section of our total business community. Take last week’s Budget, for instance…
My second irritation is the media talking about the media. So I’m going to finish this blog by mentioning two ‘real’ people I met today, both of whom I’d love to feature on the Donuts in the future.
Eliza Rebeiro is 17. She started her community interest company at just 14, to campaign against the growing threat of knife crime to young people in south London. Of course, Eliza didn’t know she was starting a business when she launched Lives Not Knives. She just did it and it gathered momentum and now she organises events, provides mentoring to young people and has all sorts of other plans to pull young people away from the gang culture that surrounds them (including business education, a theme of the day). Eliza’s properly inspiring.
The other is the beautifully-dressed Adam King, co-founder of affordable bespoke tailor King and Allen. I have to declare an interest here - King and Allen is based down the road from my flat and I bought one of their suits with some redundancy money about five years ago. At the time they were plying their trade from some pokey rooms above, I think, an abandoned bank branch, and I was struggling to find a job. It’s a very nice suit.
Anyway, Adam’s story started with a successful world record attempt and - well, more of that another time. Meeting Eliza and Adam made my day. There are hundreds of thousands of excellent people starting and running myriad businesses all over the UK. Every one of them has a story worth telling and every one of them is deserving of support and recognition. As long as initiatives like StartUp Britain don’t lose sight of this simple principle, they should do all right.
Today sees the launch of StartUp Britain, a government initiative which will see the UK’s startup businesses receive support from the big corporates, and a new website to point them in the right direction for business advice.
More than 60 leading brands, including Google, AXA, BlackBerry and Microsoft, are backing the scheme and have already pledged a total of £1,500 of discounts and support packages to startups.
This week’s Budget speech was full of references to enterprise, start-ups and growth. But it remains to be seen just how much George Osborne’s budget will actually do to help small firms in the UK.
Like every Chancellor of the Exchequer, George Osborne has had to try and deliver something for everyone — and in business terms that includes local shop-keepers and high-growth technology firms, big businesses and the city.
But while there was some good news for small businesses — and lots of talk about helping entrepreneurs — many of the substantial changes look set to benefit large companies.
In fact, as Robert Peston noted in his BBC blog, this was a budget for big businesses.
First and foremost, the surprise two per cent reduction in Corporation Tax is good news for big companies. But what about the small business rate? That drops one per cent (as previously announced) to 20 per cent but there’s no extra reduction for small firms in this Budget.
The relaxation of planning restrictions will be music to the ears of some of the UK’s largest corporates such as supermarkets and construction firms. But will it really make a great deal of difference to the average small business?
George’s big moment was the announcement that fuel duty would be reduced by 1p, effective immediately. In addition, the planned inflation rise in fuel duty due in April was delayed and the annual 1p above inflation “fuel escalator” rise was scrapped until 2015.
But these gestures mostly represented a chance to grab — and make — the headlines with the clever message that this is the Budget that “fuels” growth. Do you see what they did there?
In fact, the price of petrol has gone up by 17p in the past 12 months and the price of diesel has risen by 23p. That’s the reality on the forecourt for small firms.
OK, yes we’re getting 21 new Enterprise Zones — but how these will work has yet to be revealed.
And yes, from April, there will be a moratorium exempting start-ups and all businesses employing less than ten people from new domestic regulation for the next three years. That’s just new legislation, mind.
And yes, the tax code is being simplified, with 43 tax reliefs being abolished. Call me cynical, but I would bet these are the 43 most obscure parts of the tax code — the removal of which may not radically reduce red tape for the average business.
OK, the government has agreed with the banks a 15 per cent increase in the availability of credit to small businesses. But how that translates into real lending remains to be seen. Does that mean that your business will get the lending it needs to invest in people, product development, equipment, stock — all necessary for growth.
Then there’s the merging of National Insurance and Income Tax. With NI costs rising, this sounds like a plan that could make a very real difference to SMEs. But it’s only a consultation. And the government is looking at merging the administration of NI and income tax, not necessarily fully merging the two systems. And anyway, it’s going to take ages…
Much of the talk about encouraging enterprise in the Budget was full of soundbites — tell the world, “Britain is open for business”, we are making the UK “the best place in Europe to start, finance and grow a business” and this is a “budget for making things not for making things up”.
But soundbites don’t fuel growth. And, as important as Wednesday’s Budget was, the effect of the sweeping cuts is about to be felt. With this year’s growth figures revised downwards, we’ve got a long way to go.
Rachel Miller, editor, Marketing Donut.
We have a full reaction to the Budget announcements in our news section. But here are a few brief responses:
Meera Shah, founder, Red Apple Delivery: “Overall for small business it’s fairly positive. The only negative is in terms of employing people - it hasn’t really given me any impetus to hire people. It hasn’t encouraged it. I think he’s done the best he can in very tough situation.”
Neil Westwood, founder, Magic Whiteboard: “I’m glad he’s addressed the fuel. I would have liked more but at least he’s done something about it. On my deliveries it’s costing me a lot more than this time last year. If anything it needs to be reduced by 20p!
“On the tax simplification they’ve got rid of 100 pages, but when you have 10,000 pages, it’s not many. They need to do more but it’s a good start.”
George Derbyshire, chief executive, NFEA: "The impression I got was that there was a range of announcements that were relatively limited individually but together made up a worthwile package. The measures on regulation, tax simplification, public procurement are all worthwhile.
“I think there’s been a reasonable stab at a growth strategy across a wide range of industry sectors and measures. Apprenticeships are a difficult sell but once the penny drops I think lots of small businesses can use apprentices very effectively.”
Chris Gorman, spokesman, Forum of Private Business: “It’s a step in the right direction but we need more radical, hard-hitting, widespread reform to really make a difference to the lives of small business owners… We wanted to some more drastic things in terms of radical tax and regulatory simplification.”
Brendan Flattery, chief executive, Sage UK: “Whether or not George Osborne’s Budget will amount to his promised ’Bonfire on Red Tape’ remains to be seen, but the three year moratorium on regulation for small businesses can only be good news for small business owners.
“The reduction in corporation tax is encouraging, and shows the Government is at least trying to match words with action. But despite this and other positive steps to encourage investment small businesses are likely to remain cautious in their optimism. A recent Omnibus survey we conducted found small business owners were left underwhelmed by the government’s efforts to get banks lending to business.”
The Wordle above illustrates the frequency of words that appeared in George Osborne’s Budget speech. The bigger the word, the more frequently it appeared – and so, we assume, the more important it is.
The biggest relevant words here are tax and new. Tax is understandable – there were a lot of announcements around the tax system and its simplification. New? Well, I guess the Chancellor took a lot of pride in announcing one "new" initiative after another.
We then have Britain (naturally) and growth. This, the Tories have been saying, would be a “Budget for growth”. Was it? Well, given that the Budget was accompanied by a downgrading of growth forecasts, we’ve got to wonder… Nevertheless, the words business and businesses are reasonably prominent, too.
Work, however, is not. Neither is manufacturing, despite the apparent emphasis on this sector. One surprisingly large word is also. Well, maybe it’s not so surprising – this was, after all, something of an ‘also’ Budget. How many times did the Chancellor say, like a conjuror, “I promised you this, but I’m also giving you this.”
Investment in growth
Tax and business rates
Tomorrow (Wednesday, 23 March) will see George Osborne’s second Budget as Chancellor. Whatever measures Osborne reveals tomorrow, they will be announced against a backdrop of slow growth, rising inflation and impending cuts.
Frankly, it’s not the best time to be Chancellor. As the latest results from Sage UK’s monthly omnibus survey reveal, some 44 per cent of small-business owners are feeling nervous about the impact the Budget will have on their business. Only 5 per cent of the 1,200 survey respondents were optimistic.
So, what are we all worried about? Sage’s survey identified increased National Insurance contributions, enterprise zones and bank lending as the key issues bugging small firms. The small business groups are calling for the business tax system to be simplified and red tape to be reduced - and tax and regulation are likely to be the hottest issues tomorrow.
The coalition government itself has promised the most “pro-enterprise” and “business-friendly” Budget in a generation. They’ve suggested that they’re going to ease employment law, cut red tape and reform the planning system, among other things.
But it remains to be seen whether the government can keep small businesses happy. Follow the Budget 2011 live on the Donuts and find out what happens.