Many government officials use the words ‘employer’ and ‘SME’ as code for ‘big enough businesses for us to bother about helping’.  The news of a 17 year high in unemployment and prediction of 2 million in the future, hopefully means that there must be a change in policy right across Government. Surely they cannot continue to ignore the 4.3 million micro enterprises (0-9 employees) which represent 95% of all UK enterprises?  Less than 40% of us are VAT registered and most have a turnover of £10-£50,000 per annum.  Yet, being ‘micro’ doesn’t mean ‘too small to encourage’. We are hard workers and risk takers, trying to earn a living in a hostile environment. More and more want to do what we do.

Any government policies to help us will require joining us as enterprise and social enterprise owners in our world. Any support and training must be from people and organisations we already trust. Never has this majority felt so discriminated against and never has the old joke rung more true that the 10 words most feared by small and home business owners are ‘I’m from the Government and I’m here to help you!’

Yet Government cannot achieve social inclusion, eradication of poverty; hit their 80% employment rate or their productivity and skill targets if they fail to support self employability, start ups and micro enterprise owners. This discussion piece suggests some ways this support can be provided.

Recognise our importance and difference

Self employability and enterprise skills/know how are a ‘must-have’ today, as most corporate management and leadership development was clearly tripe and didn’t make the world of big business succeed.  Indeed, an estimated £24 billion is lost just in resolving in-house corporate conflict each year: it is no surprise to find that micro businesses are happier and sexier (I made that last one up) places to work. It’s all done without 360 degree appraisals too! Micro enterprise is where communities, the jobs and growth will come from.

One in seven of the adult work force is self employed or runs a micro enterprise.  By 2020 it may be closer to one in four.  The successful company of the future, with few capital assets, will flexibly bring in self employed professionals and independent contractors to manage increased workload, rather than take on employees.  Micro enterprise owners already employ 25% of the workforce. 

Self employment is often the only answer to disadvantaged individuals and communities. We have an aging workforce and if you’re made redundant at age 45, you only have a one in ten chance of getting a new job. Many enterprising women, ethnic minority business owners, people with disabilities, social enterprise founders and people living in disadvantaged areas  ‘go it alone’, because they recognise it is the best available and most fulfilling option. Half of all enterprises in the UK are now run from home.  Indeed, running your own enterprise isn’t just an opportunity to get away from the ‘prats and politics’; it is often the only opportunity left to earn a living and put food on the table, whilst having a semblance of control of one’s own destiny.

Putting money into supporting the micro business sector

In the current climate, it makes sense for Government to enable micro business owners to have the environment, skills, know how and support to survive and thrive.  It is now clear that big business will continue its inexorable decline.   Government’s practice of trying to pick and then invest in ‘high growth’ new businesses and spread betting on the older biggies to come from behind must stop now.

More jobs and economic growth will come from hard working, lean, flexible, opportunistic, enterprising people than from the legions of hugely trained, highly qualified, jargon ridden, slow moving, in fighting, fat cat corporate managers and their consultants. It’s about creating the local community enterprise environment and continuous support for micro and home business owners to thrive. All start ups should have the right to get the skills, know how and high quality support they need to give them the best possible chance of success in their new career.    

The last few years have seen huge cuts in publicly funded support to self employment (rather than employment), start ups and micro enterprise owners.  Now, it should be a national priority to help secure the future of as many as possible of the 400,000 start ups each year and 4.3 million existing micro enterprises.

No new government money or infra structure is necessary. The Local Enterprise Agencies, Business Clubs, InBiz, Chambers, Prince’s Trust, Prime, BizzFizz, Business Membership Bodies, Trade Associations, Community Groups including Community Based Business Support organisations along with fellow business owners, friends and families, accountants, bank advisers and the rest can be enabled to provide sustainable enterprise training and support networks. They are ready, experienced and proven to ensure that 85% of start ups will survive the first two, tricky years of trading.  Without their support, another 20-25% will fail and be without a job.

Robin Hood’s Enterprising Seven Point Plan

So, I have a “cunning plan” to put some sizzle into our economic and employment sausage.   Let’s call it Robin Hood’s Enterprising Seven (usually a lucky number) Point Plan.

1.            Rob the rich: take away about one quarter of the £billions of government money This is money currently spent on: unemployment to employment rather than self employment; subsidies for employment and apprentices, finance, technology, capital assets, skills, qualifications, training (Train to Gain alone will be £1billion next year), quality standards and regulatory help to the larger SME and major private sector organisations – the ‘usual suspects’.  This would mean that around 60,000 enterprises will lose one quarter of their current government support.

2.            Provide this money to help fund support and learning for those who seek it within the 400,000 start ups per annum and those running 4.3 million existing micro enterprises via those people, organisations and networks that are already trusted by, credible with and competent to help the intended recipients. It’s called “going with the grain and joining entrepreneurs in their world”. Being demand-led also saves the hundreds of £millions wasted annually on government marketing to push programmes at small business owners.

3.            Remove current criteria for existing government funded programmes whose criteria serve to exclude the self employed and micro business owners.   For example: enterprise owners having to do full level 2 and level 3 NVQs (how much time do they think we have?) to get the vital enterprise skills training under ‘Train to Gain’, or “For organisations with 10 to 250 employees, we offer an in-depth skills analysis for owner/managers, plus grant support of up to £1000 to develop leadership and management skills”.  All learning and support for enterprise has to be in the context of the actual enterprise being run.

4.            Use the banking sector’s need to build credibility and let them help in developing local community enterprise support networks.  We can use our existing enterprise friendly good practice and quality assurance to build on the banks’ current, good start up help (more widely available than government’s), branch network and quality websites. Put Lloyds TSB, Barclays and HSBC in charge of enabling a universal, enterprise start up support offer, empowering existing enterprise support communities, micro loans, and free mentoring and coaching within the community to everyone thinking of, preparing for, starting up, or in the first year of running an enterprise in the UK. 

5.            Make it a condition of this help to start ups that they are financially helped for their first year (about £200 per person) to join a small business membership organisation (e.g. FSB, FPB, Chamber of Commerce, IOD) or Business Club (e.g. The Business League) to get that vital continuing support.

6.            Provide incentives for start ups to take on employees in their first year. Examples of such incentives might be: benefits available for staff and owner during test trading phase; 12 months’ reduction in regulatory burden (e.g. contribution to first year’s cost of staff holidays and sick pay); training allowance; personal tax reduction; VAT raised to £100k and threshold waived for 2 years from start date. This package of incentives only made available if they take on and continue with employees.

7.            Existing self employed and micro enterprise owners who wish to grow in revenue and/or staff should have the right to free access to their business specific e-/video/ audio/forum-based learning/support, available from their bank, business club/membership body/trade association and Business Link portal (or equivalent in Scotland, Wales and Northern Ireland).  All such enterprise owners should be allowed to access subsidised development support for their enterprise skills, with up to, say, twenty hours per annum from accredited, small business friendly SFEDI accredited advisers, trainers, coaches and mentors.

The Return on Robin Hood’s Redistribution of Funds

What will Government get in return for its investment of 25% of the money that’s currently going to the ‘usual suspects’?  Self employability and enterprise skills and know how will be regarded as just as important as employability and management skills and know how. Micro enterprise will lead the way on employment, productivity improvement and growth. 

Most of all, Government will end up with an army of the most hard working, (53 hours a week on average with 25% taking less than a week’s holiday), motivated, (no-one wants to go back into employment), innovative, (the majority of innovation comes from small business owners) and healthiest (hardly ever take a sickie) micro enterprise owning men and women, who turn disadvantage into opportunity and adversity into the realisation of their potential.  All we need is a little encouragement.   We may even forgive Government for a regulatory hell, spending our money to help our big business competition and then buying us some banks, rather than helping us to earn our living.