The importance of Entrepreneurship and Business Support

When I last checked around 99% of the circa 4million businesses in the UK were SME’s (less than 250 employees) and over 55% of non-governmental jobs were with SME’s.

I suspect with the economic climate set to worsen before it improves then we will see an increase in the latter statistic if not the former.

There will be casualties across the company spectrum as a result of this economic crisis, however, I suspect there will be relatively more job losses amongst large employers than SME’s. This is for two reasons, if you’ll excuse the mass generalisation. Firstly, the large companies are less able to adapt to a changing environment and innovate and secondly they have relied much more heavily on bank debt.

These two factors also mean that employees who have recently been made redundant are going to struggle to find work with another large employer in their sector and so out of necessity they will turn to SME employers or even setting up on their own.

Being an entrepreneur or employed in a small company isn’t going to be easy over the coming months and years. Those that don’t embrace the ability to innovate and adapt afforded them by their size will fail. But it will be the SME sector, unencumbered by debt and large company inertia and driven by the need to innovate, that pulls us out of recession.

It is has therefore never been more important to ensure that the right support is in place to support fledgling entrepreneurs.

The reality is that even before the current crisis entrepreneurship was fast becoming greatly aspired to as a career and lifestyle choice with celebrity entrepreneurs being splashed across our magazines and television screens.

The good news is that the support has never been better. Even compared to 7 years ago when I launched my first business. At that time, The Hive at Nottingham Trent University, was the only business incubator unit we found. Now you will find one in every university in the region.

There are now some very clearly defined and hugely practical business support schemes funded by the public sector. Such as Business Link, High Growth East Midlands, East Midlands Business Champions, Mentoring for All and of course Growth Investment. Each have a specific role to play.

At Growth Investment our role is to champion the opportunities to raise finance to grow your business and guide entrepreneurs to further sources of support and/or funding through our network of specialists.

The reality is that successful serial entrepreneurs raise finance to grow their businesses. We want business owners in the region to consider doing the same. There are many different forms of finance and our events, website and network of specialists can help them understand and potentially access these forms of finance.

Most businesses fail because they are undercapitalised or they don’t have the right management. An integral part of the finance raising process is a thorough examination of the management team and so successfully raising finance will mean that a company will have addressed the two major threats in one process.

If small companies are struggling financially now due to the current conditions there are two things for them to remember. Firstly, cash is king so manage it very carefully and secondly, anticipate future needs and speak to sources of finance as early as possible.

If a company has been growing and has plans for future growth then this could be a very positive period for them. There will be as many opportunities as there are threats. A company just needs to make sure that it is sufficiently capitalised to take advantage of these opportunities.

In my opinion, being entrepreneurial requires the ability to spot opportunities, innovate, adapt and persevere when the going gets tough and be bold when those around you are getting scared.