Small businesses hold key

You can also view this blog post in today’s (02/08/10) North West Insider: http://bit.ly/bimtAw

The financial giants that drove this country and indeed the global economy into recession are not going to get us out of it. Inward investors to the UK have also become our fair weather friends – in times of global crisis they withdraw back to their homeland or relocate to low-cost locations in eastern and central Europe leaving a void within local economies – the impact being direct job losses and demise of the supporting supply chains.

Why are we not putting more emphasis on growing our own talent? The small businesses who have the desire and capability of becoming tomorrow’s regionally and nationally significant businesses.

There is increasing interest in the role that fast-growing businesses play in economic development – quite rightly so! Gazelles, as they are also known, are few and far between, they represent only 5 per cent of business stock in the UK, but they create up to 60 to 70 per cent of new jobs. They bring with them innovation, creativity and graduate jobs, and many are international players. They are pivotal to the future growth of the UK and our regions. They are the regionally significant employers of tomorrow.

It is important to remember that it is the fast-growing companies that will pull us out of recession – not the corporate giants that created economic misery for many individuals and families over the last two years. We must nurture and grow the next generation of ambitious entrepreneurs because they make such a difference.

These gazelle like entrepreneurs are a rare breed and the support needed is quite unique. They often have a strong sales focus, which is fundamental to any business, but they often lack the disciplines that go with growing a team, developing structure and delegating responsibility. Management and organisational support is critical to many of these entrepreneurs – without it, they won’t grow and, at the extreme, the wheels come off and they go out of business.

Without a strong team of thinkers, doers, controllers and sellers, accessing finance becomes a major challenge, as our friends in the financial community always need to be convinced of a strong supportive structure. Why is the new government not getting to this granular level of understanding of business  need – all I here so far is conflicting discussions and debates about complicated structures of delivering support which is offering no value at the coal face.

What has struck me over the past few years is the number of contenders for the accolade of being high growth. Many of them have great propositions but they are failing to reach their full potential. The reasons are varied – they don’t want to take the risk, they might not realise their own potential, or (more often than not) they simply don’t know how to make it happen.

It’s these latter two groups on which we must focus. Any local authority or public sector group interested in creating vibrant economies must place emphasis on assisting such individuals and companies. In the long-term, these entrepreneurs will repay the economy back many times over. A stimulus for change and thinking big needs to be the key message for those with latent, untapped potential. They need to be shown how to:

– Create the right mindset for growth by giving them the tools to cascade a vision into a plan
– Lead and motivate a team to move in the same direction
– Get everyone singing from the same hymn-sheet with values and behaviours that guide staff – “this is how we do things around here”
– Take action: success results from 20 per cent thinking and 80 per cent doing
– Release their passion to live fulfilled and meaningful lives
– Embed innovation in their organisations – from the front door through to staff and the market place
– Recognise that staff are the most important asset of any business – they are more important than customers; if staff are happy so are the customers
– Do away with the fear of selling – so many have this
– Focus on the customer world and deliver outstanding service
– Unlock the potential of their intellectual property – the hot investment topic of the decade
– Build strong partnerships and alliances to reach scale more quickly
– Embed systems and processes that become the dials on the business dash board

Encouraging a philosophy of disciplined entrepreneurship is what makes businesses enjoy long-term sustainable futures. Public sector bodies must play an active role in spotting and supporting these stars of tomorrow.

Investment is all about making choices and taking risk but there is overwhelming evidence to suggest that these fast movers bring added value to the UK. So, going forward, where should public sector invest its cash? In businesses that go nowhere or in those that have a real opportunity to make a difference?

What I would personally like to see is more doing and less talk about what is going to be done to support small businesses. It just strikes me that the powers that be have lost touch with grass roots of what needs to happen at the coal face.

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