Blog

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

 

Do the disenfranchised make better entrepreneurs?

There is nothing like an external threat or common cause to unite a group and maybe even encourage enterprise. Just consider for three large disenfranchised groups in particular.

Firstly, the Quakers, a Christian nonconformist movement founded in the 1600’s. They who refused to pay tithes & swear oaths and faced the full wrath of the crown and church – not to mention the local mob. There values developed to include non-violence, working democracy, respect for individual and equality. By 1700 Quakers had widespread interests in small scale trading such as farming, skilled trades & shops. From this strong community emerged many ‘household’ names: Fry, Cadbury and Rowntree (choclolate) and Friends Provident, Barclays and Lloyds (finance). Initially, they were excluded and isolated from society, government, university and professions.

Secondly, the British Asian community, which generates 10% of UK GDP but is only 2.5% of the population. There are many famous names: Lakshmi Mittal (the founder of Mittal Steel the world’s largest steelmaker, is the world’s third richest person) and Lord Tom Singh (who founded New Look, in 1969 with the help of a £5,000 loan from his parents). “The figures are quite staggering. Many on the list [Top 100] arrived on these shores without a penny to their name – and they have built multi-million pound business empires. Entrepreneurship, coupled with a wonderful work ethic – fuelled with a desire to better oneself – is a potent force driving the British Asian community” (Institute of Asian Professionals). Again, initially, they were excluded and isolated from areas of society.

And finally, a much larger disenfranchised community – women. Only 14% of all small to medium-sized enterprises (SMEs) are women-led.

A recent report by the Women’s Enterprise Policy Group highlights the ‘multi billion £ opportunity’ and proposes that women’s enterprise is the ‘secret weapon’ for recovery of UK economy. “Already female-led businesses contribute more than £75 billion to the economy – and their role in growing the economy, and creating and sustaining new jobs, is crucial to recovery and growth. But despite this level of activity, women are too often invisible within the business arena, and at a time when many businesses are struggling to survive and grow, there is a danger that the progress made to date will falter.” They call for government provide to:

  • More business growth support for existing women entrepreneurs
  • A women’s enterprise Government champion within BIS or the Treasury
  • A charter to ensure more women-led businesses are included in public and private sector procurement
  • Support from Local Enterprise Partnerships to promote women’s enterprise in their economic development strategies

Perhaps the main lesson to be learnt from these three disenfranchised groups is the communities need to create role models and take action themselves. If they had simply waited for permission we would have no Barclays, New Look or Body Shop on the UK high street and countless other in less visible enterprises.

Prof Nigel Lockett FRSA

Looking beyond the ‘triple crown’ of enterprise education

I’m conscious that the ‘triple crown’ of enterprise education only exists in my mind. But, since when has that stopped me from expressing a view!

The ‘triple crown’ I speak of is not that of rugby union, but the Enterprise Alliance UK, which seeks to make a strong case for enterprising learning and practical development for all students in UK higher education. It was founded by Enterprise Educators UK, Institute for Small Business & Entrepreneurship (ISBE) and National Consortium of University Entrepreneurs (NACUE) in 2010. All are membership-based organisations and contribute to the enterprise education debate in different ways and from different perspectives – educators, researchers, practitioners and students.

What can universities do to support the Enterprise Alliance UK? At the Leeds Enterprise Centre, we have decided to support it in a very practical way. By funding each organisation to develop their own unique contribution. We are an institutional member of Enterprise Educators, a university partner of NACUE and a high-level sponsor for the ISBE conference 2011. Not only does this help the organisations directly, it also facilitates the involvement of all the staff at the Leeds Enterprise Centre.

But, there is still one jewel missing from my crown. That of ‘enterprises’ – the entrepreneurs and business owners who want to support enterprise education and the development of entrepreneurial skills both of students and themselves. I can see lots of associations, clubs and networks but none are quite what I’m looking for.

We have created our little gem at the University of Leeds. A small but select group of entrepreneurs who have agreed to provide students with ‘real world’ experiences, which can help them to understand how their enterprise education fits with a wider perspective of business. The contribution of these Enterprise Ambassadors to our learning & teaching and business start-up support programmes are invaluable in developing the entrepreneurial spirit in our students and gives students a chance to develop ‘enterprise’ skills above and beyond their University education.

We are also ‘doing our bit’ for entrepreneurs by helping to deliver the Goldman Sachs 10,000 Small Businesses initiative in Yorkshire.

If you see any rough diamonds that could be shaped into my missing jewel do let me know!

Prof Nigel Lockett FRSA

Head in the Clouds 2.0

[STOP PRESS June 3, 2011: Apple launches iCloud]

There is simply too much information or content on the Web and an ever increasing number of things can be done on the Internet. Trying to keep a track of it all is mind blowing – it’s feels like having your ‘head in a cloud’.

But there might be a solution to all this … Cloud computing. Moving everything on the Web means that filtering or personalise content to suit your personal needs is now possible. We know that the secret to the Apple iPod’s (http://www.apple.com/ipodclassic) success was the ability to easily navigate through thousands of songs. Google seems focused in producing innovative Web 2.0 applications (http://en.wikipedia.org/wiki/Web_2.0) to help us achieve this to the seemingly infinitely expanding content of the Internet.

The move to ‘doing business’ on the web, started with a trickle but now seems more like a river in full flood!

In many ways, Google epitomises this better than any company. We are all familiar with Google as our default search engine. But, they have done more than anyone else to move applications away from our PCs into the Cloud. Just look at the functionality of GoogleMaps (http://maps.google.com) and the collaborative power of GoogleDocs (http://docs.google.com). So, with a simple gmail account (mail, contacts, diary, etc.) small business can have the functionality of MS Office and collaboration at very little cost. And there’s more …

Now even, Microsoft is moving its applications into the Cloud (www.microsoft.com/Cloud)

But why stop there? What about doing your accounts online. Here is just a few of the providers:

  • QuickBooks – http://quickbooksonline.intuit.com
  • Sage – http://www.sage.co.uk/welcome/sage50online.aspx
  • Liberty Accounts – http://www.libertyaccounts.com
  • i-Tr@der – http://www.ipsx.co.uk/IPS_SMEPlatformOverview.htm
  • ClearBooks – http://www.clearbooks.co.uk

Is it time to get your head into the cloud!

Prof Nigel Lockett FRSA

Chapter 1: Introduction

The many faces of entrepreneurship

‘The carrying out of new combinations we call ‘enterprise’; the individuals whose function it is to carry them out we call ‘entrepreneurs’. Joseph A. Schumpeter, twentieth century economist

  • Opening case: Helen Child: an entrepreneur looks back
  • Entrepreneurship in the twenty-fisrt century
  • Scoping and defining entrepreneurship
  • Exploring entrepreneurship: our approach
  • The entrepreneur’s story
  • Researching entrepreneurship
  • The researcher’s tale
  • Student entrepreneurs: where are they now?

Exploring Entrepreneurship: Practices and Perspectives by Richard Blundel and Nigel Lockett. Published by Oxford University Press in 2011.

 

Keep taking the tablets 2!

With today’s UK launch of Apple’s iPad2, I couldn’t resist updating my blog of just one year ago. I’ve colored new text in blue.

The idea of a Tablet PC emerged in 2001 when Microsoft used the term to describe a flat mobile computer, which the user interacted with through a touchscreen or stylus. Microsoft’s Window XP operating system was offered in a Tablet PC edition to support manufacturers in providing these new devices. They had the advantage of mobility and simplicity of interface. Bill Gates is reported to have said, in 2003, that “If you go out five years from now, and look at portable computers, virtually all of those will have this tablet capability.” By this stage, Microsoft had reportedly spent $400 million to build a tablet PC for Windows XP.

However, in spite of key manufacturer support, they were slow to take off – particularly in consumer markets. Hewlett-Packard developed a number of devices over an extended period. Including, the HP TouchSmart series of tablet PCs and the HP Slate. Clearly, both Microsoft and HP had confidence in a market emerging for these Tablet PC devices. However, they proved relatively expensive to produce and perhaps understandably sold to specialist customers, such as in logistics and medical environments. By the end of 2009, competition centred on just one operating system, Windows 7 and a few manufacturers (including Fujitsu, Hewlett-Packard, Panasonic and Toshiba). Customers tended to be in specialised areas and limited in number.

Perhaps not a particularly attractive market for new entrants?

In April 2010, Apple computers launched their iPad starting from $499. Described as, “A large, high-resolution LED-backlit IPS display … An incredibly responsive Multi-Touch screen … Scroll through a page just by flicking your finger up or down on the screen … pinch to zoom in or out on a photo.” (www.apple.com/uk/ipad).

The Apple iPad was supplied with a number of popular applications, including: web browser (Safari), mail, photos, music (iPod and iTunes), videos (YouTube), books (iBooks) and the App Store. Like many computer devices, the iPad is both a product and a service. This light and thin product capabilities centred on the large multi-touch screen, long battery life, powerful processor and wireless and 3G technologies for connectivity.

A winning formula? The service element of the offering draws on two unique features which competitors found difficult to replicate: firstly, iTunes the proprietary music and video platform operated by Apple, the service that originated with the iPod range and was extended to include the iPhone and iPad devices, subsequently dominating the online music sales. By March 2010, Apple had sold 10 billion iTunes. Ensuring the iPad had access to iTunes provided instant content.

Secondly, the App Store provided access to over 150,000 applications written by a rapidly growing independent community of programmers and service providers. These applications were originally designed for the iPhone. However, even before the launch of the iPad in March 2010 Apple were providing support to these developers with SDK 3.2 beta, iPad simulator and developer community programme.

It might be interesting to reflect on the portable music market dominated by the Sony Walkman before the launch of the Apple iPod and the mobile smartphone market dominated by Nokia before the launch of the Apple iPhone. Clearly, Microsoft and the large laptop manufacturers dominated the mobile computing market at the beginning of 2010. But then … enter the iPad.

I think Apple might just be onto something. For the original iPad Apple sold 300,000 on the first day and started to impact of the sales for devices. Some are predicting sales of 500,00 for the first day of iPad2 sales in the UK.

Prof Nigel Lockett FRSA

Professor of Enterprise, Leeds Enterprise Centre, University of Leeds
President of the Institute for Small Business and Entrepreneurship
www.nigellockett.com

Ever decreasing circles

In writing a blog about blogs (well social media to be more precise) I’m very conscious this is a ‘wheel within a wheel’. However, I can’t let the opportunity of a new book on ‘Why You Can’t Ignore Social Media in Business’ and the approval of new ‘Social Networking for Enterprise’ module at the University of Leeds in the same week, go by without comment.

It is self-evident to new graduates that their social lives at university have been shaped, buffeted, driven, disrupted and generally invigorated by social media (Facebook, Twitter, blogging and online chatting). But, why would this be important to their working lives or business more generally?

What makes social media different from existing communication channels is not what is being said (or promoted) but the very nature of the channel – the speed of delivery and the opportunity for interaction, recommendation and ‘buzz’. Imagine you could introduce that energy to your business communications strategy.

As Victoria Tomlinson, author of ‘Why You Can’t Ignore Social Media in Business’ and Chief Executive of Northern Lights PR, puts it … “social media is important because:
•    Brings your business to life
•    Gives you credibility
•    Provides rich, current content for Google ranking
•    Gives your business a personality
•    Portrays your expertise to your customers and clients
•    Helps you find and build [new] relationships
•    Leads to new business”

Victoria’s book if full of case studies.

And according to Susan Gunelius in The Entrepreneur, there are even 10 laws of social media marketing.

Yes, I know that business people have heard all the hype about Internet-related services – from e-mail to websites and from e-commerce to online marketplaces. But, for me social media provides relatively low-cost opportunities for businesses to expand their profile. The technology is not complicated or expensive. It’s the content that is difficult generate – it requires a change in mindset to recognise this ‘online chatter’ can be managed, targeted and orchestrated for business benefit. You could got of course call on the help of your customers. Loving Outdoors are building a new online shopping experience. Not for their customer but by their customers. See Loving Outdoors Facebook – Like?

If a new ‘Social Networking for Enterprise’ module is being developed as part of the employability agenda for final year undergraduates at a leading university perhaps social media has come of age.

Not so much, ‘ever decreasing circles’ as ever expanding horizons.

Prof Nigel Lockett FRSA

Professor of Enterprise, Leeds Enterprise Centre, University of Leeds
President of the Institute for Small Business and Entrepreneurship

www.nigellockett.com

A long standing love affair

The seemingly ever increasing love affair with or passion for chocolate dates back centuries and takes many forms. Today, the industry is dominated by large companies, such as Mars, Kraft and Nestlé yet supports a range of more specialist chocolate confectioners, such as Green & Black’s, now owned by Kraft (www.greenandblacks.com), Thorntons (www.thorntons.co.uk) and Hotel Chocolat (www.hotelchocolat.co.uk).

In such a well established and crowded market it might seem difficult to create a new way of exploiting our passion for chocolate. Hotel Chocolat (formally ChocExpress) was founded by in 1993 as a catalogue-based company in the UK. The company provides an excellent example of creativity for business idea generation (the tasting club), opportunity recognition (used to support its existing catalogue-based sales) and exploitation in an enterprise (developing a complimentary brand and new income stream within the main business operation). But what was the big innovation? Yes mail order was new but to achieve this the packaging had to redeveloped to fit through the average letterbox and arrive safe and sound on the doormat!

Is there no end to the courting? Last year’s £11bn acquisition of Cadburys by Kraft would suggest not (http://bit.ly/dSMBM0).

I wonder which existing UK-based company will emerge to take on the mantel of Rowntrees or Cadburys? Thorntons, Hotel Chocolate or even Helen and Simon Pattinson’s Montezuma (www.montezumas.co.uk)  founded in 2010.

But remember it’s our passion for chocolate that is fueling this competition!

Prof Nigel Lockett FRSA

Professor of Enterprise
President of the Institute for Small Business and Entrepreneurship
www.leeds.ac.uk/lec
www.nigellockett.com

Business growth: Policy, practice or just wishful thinking?

We all know the official line that given the financial crisis, public cuts are a necessary evil. And that whilst this will result in public sector job losses the ‘private sector’ will create the jobs to replace these. However, there are growing concerns about achieving this.

In terms of creating new jobs, when we say the ‘private sector’ we mean small to medium-sized enterprises (SMEs). So, what is the government going to do to support growing businesses?

The BIS ‘Bigger, better business’ proposal to help small firms start, grow and prosper was published last week suggesting eight points (Download a PDF of the report).

  1. Online help – tailored to each business
  2. Telephone contact centre – to support one service
  3. Helping start ups – the new Enterprise Allowance Scheme
  4. Business mentors – practical advise from experienced business people
  5. Business coaching fro growth
  6. Manufacturing advisory service
  7. Tailored help – women, BAME and service personnel
  8. Other Government funded help – revised ‘Solutions for Business’ for strategic advice, reaching international markets and supporting innovation

But will this be enough to support the creation of 100,000s of new jobs?

STOP PRESS

11/01/11 There are some early signs of US small businesses creating jobs

Prof Nigel Lockett FRSA

Professor of Enterprise
President of the Institute for Small Business and Entrepreneurship
www.leeds.ac.uk/lec

www.nigellockett.com

New Year’s resolution 2011: Time to get closer to your suppliers?

Last year, customers were the focus of my New Year’s resolution. With the big freeze hitting retail sales and the increase in VAT to 20%, this is still very appropriate. However, I think it is now time to look back, not on last year but supply chains.

Of course, one way to increase profit is to get more sales and one way to improve cash flow is to collect money from customers sooner. But reducing cost and extending supplier payment terms can be equally productive.

There are two ways to approach this – aggressively or constructively. It would be counter productive to extend payment times without the supplier’s consent. Just look at the reaction to Invensys Rail recent announcement. For products  – they could simply stop supply and leave you to pick up the cost of stockouts and lower customer service levels. For services – they could keep you waiting or under deliver. However, many will be prepared to negotiate on both price and payment terms for larger, guaranteed or call-off orders, new business and promotional activities. There is always room for negotiation with suppliers – existing and new. Perhaps there are alternative suppliers who would be keen for new business.

For more information see:

* Business Link have a practical guide to negotiating.

* Growing Business have 8 top tips – practice makes perfect!

* CHIPS offer training courses.

Last August’s blog highlighted the emergence of the ‘Networked Entrepreneur’. These networked entrepreneurs not only use their networks to gain new business but to deliver new services often to existing customers. So, reconfiguring your supply chain can result in new product or service offerings.

Remember to act responsibly with suppliers. In terms of payments,  you won’t go far wrong by following the ‘Doing Business Together‘ principles.

Perhaps 2011 is the year in which to renegotiate with both existing and new suppliers and to reconfigure your supplier network in order to reduce costs and innovate your customer offering.

Prof Nigel Lockett FRSA

Professor of Enterprise
President of the Institute for Small Business and Entrepreneurship
www.leeds.ac.uk/lec
www.nigellockett.com