Giving Evidence

Further to my last post, you can hear the entire audio recording of yesterday's parliamentary committee session by clicking here.

Doug was very vocal, particularly given that he has just finished a somewhat scathing report on the current state of business support in Britain, but I did manage to get a few words in edgeways!

The key outcomes were:
- If we truly want to encourage entrepreneurship in Britain then enterprise skills need to be woven throughout the educational curriculum.
- Formal enterprise qualifications (like an MBA for entrepreneurship) sponsored by the government could be put in place. Not intended to be compulsory, but banks and other backers might be more willing to finance individuals who have undergone proper business training. Such a qualification would definitely reduce the level of early start up failures.
- What businesses most need is customers. Therefore not only open government procurement to small businesses but also provide incentives/programmes where entrepreneurs can create products/services to solve areas of concern in the UK - for example energy innovation.
- The role of banks needs to be reviewed, not just to encourage more support for start ups but also their role in frequently 'pulling the plug' on businesses which could otherwise be saved. They need to be made as culpable as directors in any post business failure review performed by DBERR.
- Improve the EIS scheme to give 'friends and family' type investors bigger tax breaks for putting up funding for small business. (For example, under Thatcher's Business Expansion Scheme you received 100% tax relief for investments in small business)
- As in the US, your home should not be at risk if your business fails.
- As in the US, a 'Chapter 11' type provision should exist to assist companies in difficulty protect themselves while they restructure.
- We need to change our attitude towards business failure which is still considered a stigma in this country - towards an attitude like the US where failure counts as your 'stripes of experience'.

All in all it was a fascinating process to be part of - let's see if any changes emerge!

Qualified by Experience

Yet another bitchy article in The Telegraph, this time criticising the Parliament's Business and Enterprise Committee for selecting James Caan, Doug Richard and myself to give evidence this week on how Britain can create a 'higher added value economy', on the basis that James and I have experienced the failure of a business and the fact that Doug has stated he admired Eos, the business class only airline which subsequently failed.

Not sure if the author Jonathan Russell has been living under a leaf for the past few months, but given the number of businesses which have already failed so far this year, and the number likely to crash and burn over the next year or so I would have thought ways to assist and support business survival would be pretty high up the agenda for any enterprise review.

Something like two thirds of all UK business start-ups fail within their first two years (with huge numbers of associated personal bankruptcies), and less than 10% of businesses will survive more than a decade. It's not only market conditions which are to blame; the current insolvency laws - which allows ailing companies to essentially phoenix themselves through an administration process, emerging next day with pretty much identical directors & shareholders, but wiped of their debt - are a huge contributor to the statistics.

How could one of the elite few entrepreneurs who has never experienced tough times in business (and believe me, there are very very few) possibly be able to give meaningful comment?