Video Ivan Massow debates the issues facing UK The UK’s entrepreneurs with Phil Cameron and Alex Jackman www.ft.com/ ENTREPRENEURS UK­entrepreneurs FINANCIAL TIMES SPECIAL REPORT | Tuesday October 4 2011 www.ft.com/uk­entrepreneurs | twitter.com/ftreports Inside this issue Q&A James Downturn Caan answers our questions Page 2 Guest column Businesses plus dole should get their affairs in order early in a recession, says René Carayol Page 2 Finance Alternative funding options to banks Page 2 can lead Profile Nicko Williamson on green taxis Page 3 Interview Stephen Catlin talks about the to success risky business of insurance Page 3 Jonathan Moules Storey. But those who survive will also create a large number Profile Tony Banks says finds that a recession of new jobs. going into a care home can be the best time to Hamish Stevenson, founder should not be a jail and chief executive of Fast sentence Page 3 start a business, but Track, the business tracking not all entrepreneurs service, has been following the Profile Errol Damelin fastest-growing companies since discusses Wonga Page 3 are created equal 1997. He says there are about 1,750 private companies in the Social enterprise Do well and do good Page 4 t is the best of times and it UK with operating profits Tom Valentine: launching in a recession ‘imposed the discipline of building a business with a sustainable model at its core’ Rosie Hallam is the worst of times to be greater than £3m. They have Red tape Business an entrepreneur. combined profits of £27bn, One example of this is Tom echoes this sentiment: “As an market and global economy,” he of those being made redundant minister Mark Prisk In the UK, start-up activ- employ more than 1.6m people Valentine, managing director at entrepreneurial business we says. were private sector workers responds Page 4 Iity has always seen an uptick as and have added more than Secret Escapes, an online travel can’t afford to ever be compla- The problem with asking from industry. This was then the economy has moved into 130,000 jobs in their most recent club offering discounts of up to cent or stop reviewing the mar- founders to gauge the prepared- followed by a significant recovery, since at least 1973, year. 70 per cent on luxury hotels and ket, and this is what has put us ness of entrepreneurs is that increase in self-employment, ris- More on FT.com according to David Storey, pro- “Knowing many of these holidays, which has attracted in a strong position to grow, not they tend to be more bullish by ing to a postwar high for the UK fessor of enterprise at the Uni- entrepreneurs over the years, 500,000 members since it just in the recovery, but nature, especially about their during the early 1990s. Interview We talk to versity of Sussex, who has been they certainly have the fire in launched in February. throughout the recession as own prospects. There are also The rise in unemployment at Paul Rose, chief executive researching the small business the belly and the track record to Mr Valentine claims launch- well.” reasons to fear that this reces- the moment, however, is being of Rixonway Kitchens sector for many years. overcome challenges and exploit ing in a downturn had signifi- The recession has been a time sion will be much tougher for driven by public sector cuts, “In essence, it tells us that opportunities,” he says. cant benefits. “As a discount to restructure the business to entrepreneurs in the UK. putting people on the dole who Interactive How to cut self-employment will rise with a Entrepreneurship is often site, our message suited the make it stronger, he says. First, all recessions are differ- may be less willing and able to through the red tape; and lag after a period of unemploy- counter-cyclical and thrives dur- times, we had to compete less At the end of 2009, RPM cre- ent, and the prospects for entre- turn their hand to entrepreneur- enterprise zones and tax ment,” he explains. ing downturns, according to with banks for technical talent ated a new layer of management preneurs are hard to predict. ial activity. breaks in England and There is nothing like the Alex Macpherson, partner at and, most importantly, it and formed two new teams to What is known, is that the Further bad news for existing Wales depressing reality of the dole, it Octopus Ventures, a private imposed the discipline of build- better meet its client demands. kinds of people being made entrepreneurial ventures is that seems, to push people to equity firm. “If a business can ing a business with a sustaina- Mr Robertson claims that sales redundant this time around are some of the key factors that attempt that business idea they launch, test their revenue model ble financial model at its core,” have almost doubled since. different. These people may well helped them to prosper in the never got round to when they and win customer traction in he says. “Independent or entrepreneurial not be best suited to creating past, such as a swift economic had a salaried job. these circumstances, they are Hugh Robertson, founding businesses are much better new businesses. recovery and access to reasona- Many of those fail – up to well set for rapid growth in more partner and chief executive structured in their ability to During the recession in the bly priced debt finance, have yet 60 per cent, according to Mr benign conditions,” he says. of RPM, a marketing agency, adapt to these changes in the early 1980s, for instance, many to materialise. 2 ★ FINANCIAL TIMES TUESDAY OCTOBER 4 2011 The UK’s Entrepreneurs Confidence, not caution, is the key to fast recovery another period of businesses that may have The best-run SMEs tend business offices in the rejuvenated a failing with fresh credit facilities. only be broken when the Guest Column uncertainty brought about moved into new territories to have the agility and West Country and its sales business. Given how well the economy, and especially RENÉ CARAYOL by falling confidence during times of prosperity leadership to adapt their operation and stores in Everything was moving company had managed the banks, regain their across the markets. without having done necessarily defensive London. in the right direction, but through the downturn, and confidence. For many small or The economic problems proper research, or perhaps mindset to a more He quickly identified an he had borrowed and the painful lessons it had Forward-thinking SMEs medium-sized enterprises, in the eurozone, made expensive hires with confident approach that opportunity to close down invested significantly to learnt, it received offers have a key role to play in it is starting to feel like particularly in Greece, no real understanding of ensures opportunities are the expensive manufac- deliver this business from four banks for new a return to a stable and late 2007 all over again. have heightened the fear the return on these grasped at the first signs turing operation in the UK, turnround. facilities. It will now adopt healthy marketplace. It is Large companies are factor, especially within significant investments, are of recovery. and picked up spare By the beginning of 2008, a multi-banking approach a lack of confidence that taking their time paying large corporations. particularly vulnerable. capacity in a high-quality the recession had hit the and has set up agreements has killed so many smaller companies and are As those at the top of When revenues are Medium­sized shoe factory in Italy, branded area of footwear with three banks in order businesses. This is the cutting back on anything the business food chain high and budgets are full, and small halving production costs. hard. No one needs to buy to spread future risk. main lesson for SMEs. and everything, from start to panic, SMEs suffer it is easy to brush companies He was able to recruit high-end shoes in a SMEs and consumers And it is time we took marketing and information beneath them; many rely mistakes under the carpet. are the the services of two downturn. The banks were share the same mindset the banks off our hate technology to training and on commercial relation- But they can come back to lifeblood of freelance shoe designers, no longer supportive and currently: they are lists. By “shafting” the recruitment. These are ships with large companies haunt businesses when our economy well known to him, who his business shrank as he remaining cautious. This banks, they will only early indicators of a as the mainstay of their times are hard. also worked for certain continued to limp along, may seem sensible for “shaft” SMEs. Banks are serious downturn. businesses. And with 70 Recessions are kinder to large fashion houses. He desperately managing his businesses, especially the lifeblood of the SME The main difference per cent of us working for well-managed SMEs. These This is vital, as SMEs moved the offices to above cash flow. regarding investment, sector and the SME between now and four an SME, it does not take businesses can pick up the tend to get the recoveries one of the stores in With financial support growth, recruitment and sector is the lifeblood of years ago is that there is long for the economic pieces of their failed they deserve. London and completely from his fellow directors marketing, for example, our economy. no run on liquidity for the shockwaves to be felt far competitors, and they reap A friend of mine acquired closed down the West and an angel investor, the and so on, but it also banks.