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?
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The three-year 'survival' rate of VAT-registered businesses has been slowly improving in recent times, with around 70% remaining registered after 3 years. NB De-registration doesn't necessarily represent business failure in each case and the data doesn't include the very smallest businesses (operating below the VAT threshold; see also http://stats.berr.gov.uk/ed/survival/).
Also, why shouldn't the experience of the founders/owners of 'failed' business have some relevance to the investigation by the Business and Enterprise Committee ? 'What to do' and 'What not to do' might be equally beneficial.
Finally, which genius in government thought that 'Enterprise Directorate' was a better name than the former DTI's 'Small Business Service' ?! ;-)
Dave.
I would be happy to contribute to the debate on this Rachel. But i fear the "paraigm-shift" of recession will catch many (even the most experienced business) people out.
Lean and mean i think is now the order of the day - with a keen eye for making a killing whereever possible. Travel light, adaptable, and be hungry to eat first etc.
Brand second.
The best people to learn from are those that have downs as well as ups. For a lucky few, they are an overnight success but what lessons have they learnt for when the bad times (like a recession) come?
One of my favourite sayings is 'it takes years to be an overnight success' which is probably the case with most success stories. I'd rather hear about the bad times as well as the good from people who have been there, worn the shirt & lived to tell the tale.
Not some know-it-alls with no shred of relevant experience but who just like the sound of their own voice or reading their own eloquent words.
I bet most of today's big name success stories have had failure along the way. How they coped with it & the lessons they learned from it, will undoubtedly have contributed to their current success.
Jon
It's really encouraging that the Business & Enterprise Committee selected you, James and Doug. They clearly recognise that if there are any lessons to be learned it's from those who are qualified by experience. Apt title to your blog Rachel.
People who try to gain 'kudos' by being so critical of other people's efforts get nothing but my contempt.
To all those championing the cause of small businesses and enterprise in the UK - I say a hearty RESPECT.
Rachel you are doing an excellent job. You have your own life, a husband and five young boys to raise and somehow you find the time to do something you so clearly and passionately believe in.
Thanks Rachel, those of us who have experienced it are very grateful.
Hi Rachel, good luck on the BERR work!
See my website for a report that looked at why director's of failing companies did not use company voluntary arrangements to rescue their viable but distressed company. This great tool has beena round for 22 years now but few know what it is.
This report was commissioned by DBERR's predecessor (DTi)and then they refused to publish the findings!
http://www.companyrescue.co.uk/docs-pdfs/Tim%20Mocroft%20report.pdf
I started working in turnaround after experiencing the last recession. It wiped out our 129 year old company and left me broke but wiser.
At that time not one single insolvency advisor told me, rescue your company!! They all said appoint us to act as receivers and we will stop the pressure! Great 85 jobs lost, business assets melted away to nought and that was (and is) called corporate recovery.
17 years on and I learned the hard way and now provide advice to others on rescue first!
Keith Steven www.companyrescue.co.uk
http://companyrescue.blogspot.com/
Since then I have advised
Rachel, you I believe are a perfect person for the job, as we all know, you have been there and bounced back with great gusto. Nothing like having people like yourself doing these sort of things, as one can not teach or learn experience, but you advise effectively on the ptifalls. Keep up the good work.
The DLOG
I think you'd be great. Although, Peter Jones would be better.
I heard somewhere that the average Entrepreneurs has the average Entrepreneur has 16.5 failed businesses before they hit it big time. (It was on one of the Entrepreneur audio CDs we listen to in the car).
Making mistakes or having businesses that fail is part of the job to a committed entrepreneur, its how you learn along with learning from other peoples mistakes. Its a job that involves high risks and a lifetime of learning that is the beauty of it.
At the end of the day the man who wrote the article is a journalist working for a paper, an employee, no an entrepreneur (as far as I know). Therefore I can only assume he has very little experience from which to draw his conclusions that Rachel, James or Doug are unsuitable for these positions. Therefore the article in my pinion is a complete waste of ink.
Talking of learning from mistakes, I really need to proof read what I write before pressing enter.
Apologies for the spelling and other errors made in the last post. :)
Ignore the Telegraph article, lets just hope the government will listen to the advice.
On another note, also beware of Keith Steven who left a comment about his company rescue company.
I got caught out with these guys. After spending thousands on their service, in a time of need, I realised they are just out to take your money and leave you to rot - mark my words!
Perhaps the journalist who wrote the article should read your book (Business Nightmares), he may learn something! And i will say it again, nothing like advice from some one like yourself who has been there done it got the T-shirt and is doing it again, by that i mean making another great success at what you do, and of course with great charisma.
TheDLOG
All is not doom and gloom. I would say concentrate on doing (REAL) business on the Net. It is a lot more recession proof than the bricks and mortar world.
There is every reason to think that consumers will be much more interested in making purchases over the Net during a recession - than at any other time.
But of course, the key is working to the right strategies (as in any other form of business).
Stephen
Why would consumers be more liable to buy over the internet, if they are watching their money or worse still have none, then what difference does it make with purchases, a recession is a recession. I must agree though with inetrnet based business, it is probably more recession safe than other types of business, possibly as they have less overheads, as opposed to those that have the expenses of premisees and the like. I actually forsee a worse time ahead than before, late 80's, and possibly longer than before. Who ever survived before will stand a good chance of survivng again as they have had the experience, but what of new companies/business.
TheDLOG
You do know of course that like many disasters in life, recession is actually a self-fulfilling prophecy.
Its like chinese whispers. The more people talk negative the more this negativity spreads and the more it affects the behaviour of the markets.
It is possible to construe things in a billion different ways. If our leaders wanted there not to be a recession - then there wouldn't be - and of course it follow vis-versa.
Instead we accept that it is naturally out of there control - which means it is out of our control!!
Which of course - it is not!!!
Don't be fooled guys!!
Rising costs in oil alone has caused a recession, as we all need fuel what ever line of business we are in. Secondly some one has to pay for the war in the middle east, at this present moment it has cost about 3 trillion dollars, and just for those who do not know, a trillion dollars is 1000 million!!
Think about it!!
The DLOG
There does not need to be rises in the cost of oil. Unless they prefer for the prices to be high of course. It is within our leaders grasp to reduce oil prices significantly.
If they care too of course. There is no shortage of oil in the world.
But there is a shortage of sound diplomacy.
Absolutely, I am glad we agree on this blog, the reason, I believe, for the massive hike in fuel costs is to fund a war that will never finish. As regard to diplomacy, there again I agree with you 100%, any situation can be rectified through diplomacy, providing of course all parties involved respect each others cultures! Although saying that I know an MP who will disagree 200%!
TheDLOG
DLOG: Surely a trillion is a million million, 1 followed by 12 zeros.
Traditionally even more in UK.
Anonymous, I think DLOG is right, one trillion dollars spent on the war is equivalent to our billion - the US trillion = our billion. Not sure why that is though...
Ah, the Million and Billion question ...
We in the UK and the US (and pretty much the rest of the world) follow this rule, known as the short scale;
Thousand = 1000 x One
Million = 1000 x Thousand
Billion = 1000 x Million
Trillion = 1000 x Billion
Quadrillion = 1000 x Trillion
Regards, Gareth
Everyone, ask yourselves this. Would Rachel be so pro-failure if she hadn't gone belly up herself?
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