The dangers of red tape

“Recently, I attended a dinner hosted by StartUp Britain, with Michael Fallon MP (Minister for Business and Enterprise) as the principal guest,” Zipcar UK General Manager Mark Walker tells me. Read on to see how he got on. 

Zipcar UK General Manager Mark Walker

“Around the table were successful entrepreneurs and organisations supporting entrepreneurs; and the Minister wanted to discuss how the Government can encourage more people to start their own business and what specific policies would ignite the growth of existing startups.  Of course, trading and commerce have been an inherent part of our national culture for centuries; and SMEs are the real engine of growth and employment - their success is pivotal to our economy’s recovery and future success. 

Radical ideas for fast results

We covered a lot of ground and tabled several challenging ideas.  For example:  for a time-limited period, could all employment taxes be waived for companies hiring additional staff?  In addition and more radical, during that time-window, could employee protections provided by Employment Law be suspended, to remove all obstacles to recruitment?  Given our current economic stagnation, where does the right balance lie between those employee rights and the need to jump-start growth and employment?  Just how sick is the UK economic patient?

Employees do not seek security from startups

Bang in line with one of the key findings from our recent SME research (The Smarter Business Blueprint - insights from SME trailblazers), there was a consensus that people joining small companies with less than, say, 30 staff are not necessarily expecting job security, but more buying into the vision of the company and the excitement of that early-stage growth.  As a company grows beyond that scale and becomes established, then it is perceived more as an “Employer”, with all the associated obligations.

Michael Fallon MP

Accelerating growth through easier access to finance and selling overseas

One of the participants in our SME research was Funding Circle and the Minister was keen to discuss new forms of financing for SMEs, beyond the large banks.  A wider range of funding channels and increased competition has got to be a good thing.  There is also room for huge improvement, when it comes to UK SME’s selling into overseas markets – how can the owners of small businesses take this step sooner and with more confidence? 

The power of public sector procurement

Finally, we talked about public sector procurement and how its placement power can be used to fuel SMEs.  Central Government has set a target of 25% of spend to be directed to SMEs by 2015.  Is that change happening and can it be extended to Local Authorities?

Lord Young believes in small businesses too

Coincidentally, Lord Young (the Prime Minister’s Enterprise Adviser) has recently published a report entitled, “Growing your Business: A report on Growing Micro Businesses”.  It sets out a number of recommendations and Lord Young states:

“Growing our smallest businesses would transform our economy – they are the vital 95%. If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero.”

So, what advice would you give the Minister?

These are important questions, demanding answers with substance.  It remains to be seen how many of these ideas filtrate through to policy and action.  Time will tell, but time is short.”

If you had 5 minutes with the Minister, what would be your jewel of advice?

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