As seen on TV? Entrepreneurship in practice

The popular media portray entrepreneurs as heroic goal-orientated individuals (The Apprentice) in constant search of finance (Dragons’ Den)

Perhaps not surprisingly, the truth is more complicated. We know from research that the characteristics of entrepreneurs include:

  • Need for achievement – motivated by making a difference
  • Over-optimism – glass is always half full
  • Risk-taking propensity – not gamblers but have a higher tolerance of risk
  • Desire for autonomy – in control of their own destiny
  • Locus of control – making things happen to them rather having them done to them
  • Creativity – thinking outside the box to generate ideas and overcome challenges

Government policy is increasingly focusing on encouraging growth in order to generate jobs. The underlying premise being, that as the public sector shrinks – the private and third sectors will need to expand and create new jobs. The Chancellor’s forthcoming Autumn Statement will include a number of initiatives to support entrepreneurship and small business growth. Just look at the recent headlines:

Osborne backing up to £40bn in ‘credit easing’ loans
Clegg: £1bn scheme will ‘provide hope’ to young jobless
Unfair dismissal: Vince Cable ponders new hire-and-fire rules

STOP PRESS 29th November. The UK Government’s Autumn Statement highlights the following enterprise measure:

  • look for ways to provide a quicker and cheaper alternative to a tribunal hearing in simple cases — a ‘Rapid Resolution’ scheme;
  • complete a call for evidence on the impact of reducing the collective redundancy process for redundancies of 100 or more staff from the current 90 days to 60, 45 or 30 days;
  • begin a call for evidence on two proposals for radical reform of UK employment law. First, the Government will seek views on the introduction of compensated no-fault dismissal for micro-businesses with fewer than 10 employees. Second, the Government will look at how it could move to a simpler, quicker and clearer dismissal process, potentially including working with ACAS to make changes to their code or by introducing supplementary guidance for small businesses;
  • ask independent Pay Review Bodies to consider how public sector pay can be made more responsive to local labour markets, to report by July 2012;
  • launch a new Seed Enterprise Investment Scheme (SEIS) from April 2012, offering 50 per cent income tax relief on investments, and will offer a capital gains tax exemption on gains realised in 2012–13 and then invested through SEIS in the same year;
  • make 100 per cent capital allowances available in the Black Country, Humber, Liverpool, North Eastern, Sheffield, and Tees Valley Enterprise Zones; and
  • introduce an ‘above the line’ tax credit in 2013 to encourage research and development activity by larger companies. 

Based on my experience of working, on the 10,000 Small Businesses initiative, with entrepreneurs wanting to grow their enterprises (both for profit and social purposes), what makes the real difference is confidence. Not just confidence in the economy or having access to reasonable bank facilities and well qualified staff, but confidence in themselves to take their organisations through the next stage of development. Of course, this runs counter to the popular media image.

So, how do you enable entrepreneurs to grow their enterprises? Well, all the above plus a support package that includes:

  • Exposure to the latest research, thinking and practical knowledge
  • Access to business advice from people who have done it themselves
  • A personal mentor who understands the pressures of leading a growing venture
  • Opportunities to network with peers not least to share experiences but all importantly to recognise that they are doing most things right!

Building confidence is a subtle process but will pay handsome dividends both in terms of business growth and those much-needed jobs.

Prof Nigel Lockett FRSA

Professor of Enterprise at Leeds University Business School
President of the Institute for Small Business and Entrepreneurship