StartUp Britain co-founder Duncan Cheatle on boosting business growth
Read Securing Britain’s Growth online now:
London business leaders tackle boosting enterprise, nurturing talent, growing exports, driving digital and securing growth in key industry sectors
In the 1970s we had less than a million businesses. We now have five million. Last year alone the UK created more than half a million new businesses. But of the five million existing businesses, three-quarters have no staff at all and only 5% have more than 10.
We are seeing more businesses start but we are also seeing fewer grow to significant size. The number of businesses with more than 250 staff has fallen by nearly 10% since the turn of the century to just 6,600. How can we support entrepreneurs able to build businesses to that size?
1. Peer-group learning
There is a marked correlation between those who scale successfully and those who take time to learn from their peers and invest in their own development. The government should incentivise entrepreneurs to access peer-group learning networks, just as they are encouraging take-up of advice through Growth Vouchers or coaching through the Growth Accelerator programme.
There are a number of forum-based organisations like The Supper Club (which I founded 10 years ago), ACE, EO, Vistage and YPO. Government should extend Growth Vouchers and the funding available under Growth Accelerator to cover subscription to these organisations, or give relief in a similar way to R&D tax credits.
2. Reintroduce taper relief
The lifetime entrepreneurs’ relief that replaced taper relief incentivises the very few high-growth entrepreneurs to sell out at £10m and to become investors rather than to scale further or grow another business. This can’t make sense. We need this rare breed of business owners to do what they do best. We need their jobs and we need their tax. Reintroduce taper relief.
3. Rebalance the media
Awareness around being an entrepreneur has grown enormously with popular TV shows like The Apprentice and Dragons’ Den. But with it there is a common perception that business owners are driven solely by money. Of course most have aspirations for wealth or financial independence but it’s seldom the primary driver. In popular media, business owners are often portrayed as the villain.
We carried out research that found that in the top 10 soap operas, 40% of business owners were criminals and most were unlikable, unethical or pathetic. It makes for entertaining media, but at what cost to those that don’t have positive direct role models? We need to see more than Richard Branson in the media as a role model for the next entrepreneurial generation.
Duncan Cheatle is the co-founder of StartUp Britain, and founder of the Prelude Group