The subject of young entrepreneurship in the UK was described as “the new rock and roll” in the event, hosted by
Santanderand National Association of College and University Entrepreneurs (NACUE).
Skills
Asked by a university student in the audience what skills were needed “in the real world”, Santander Corporate and Commercial Banking’s head of education, Chris Sharkey said he believed surrounding oneself with talented people with different skills, and doing this as early as possible, was a good place to start.
Finance Foundation Director, Andrew Freeman, argued the single most important attribute was simply to work hard, and not to be afraid of failure. Additionally a balance of soft skills like networking, planning and problem solving, as well as harder skills like managing intellectual property and exporting were also important, he said.
Chairing the event, Financial Times enterprise correspondent Jonathan Moles asked whether entrepreneurship could actually be taught. A member of the audience who was studying entrepreneurship at the Peter Jones Academy said education did not do enough to inspire young people, but said what set entrepreneurs out from others was their drive.
Johnny Luk, CEO of NACUE said most of the skills he used were learned from extracurricular activities, rather than from studying.
Freeman said the UK’s higher education system “is still a pretty elitist system”, and was not set up to recognise or support enterprising ideas.
Sharkey suggested that actually going to work in an SME for a time would undoubtedly equip a young person with some crucial business skills to get them started.
Challenges
Labour’s business ambassador Lord Mitchell was clear that entrepreneurship was not the ‘easy’ route, saying it was incredibly rewarding, but also continuously difficult.
“It’s frightening” he stated, “and you’ve got to be prepared to be the person who can go through all that.”
Politicians who regularly spoke about supporting new businesses often lacked a full appreciation of just how hard it was to be an entrepreneur, the Labour peer said. “They have no idea what they’re talking about, because they’ve never done it themselves.”
On the value of some of the processes took place in businesses, Lord Mitchell was scathing.
“I doubt Steve Jobs or Bill Gates ever wrote a business plan” he said. “Business plans are a process people go through so they can cover their own backsides.”
As a side note, the Labour peer highlighted how serious an issue late payment was for small businesses. Organisations that paid SMEs late were “absolute sods” he said, noting the existence of a website that allowed small business owners to report such late payments and threaten legal action.
Access to finance
Freeman argued that most SMEs were supported perfectly well by banks. There were various reasons to criticise banks, he said, “but not lending to SMEs is not one of them”.
Lord Mitchell had no such confidence in SME’s ability to access finance, describing the difficulties he had had with this when starting his own businesses.
“Nobody starting their own business is going to get money from a bank. If you’re a start-up and you have no assets, you will not get the money.”
Sharkey agreed that banks were a support industry, and existed to support businesses. He agreed that the first months and years of a new business were by far the most difficult.
Government support
Asked what the government could do to better support young entrepreneurs, Luk said government had a huge role to play in providing the right environment for enterprise. Creating and building dialogue and engagement between young entrepreneurs and politicians was key, he said, as this would allow the better flow of support ideas.
Sharkey noted how Santander had connected 1,500 students with SMEs last year, and would be increasing this in the coming year.
Freeman was keen to stress the point that most small companies were sole traders that were not particularly entrepreneurial, and had no real desire to be. There was therefore a danger that government policies which were targeted at all small business actually needed to be more specific in their focus.
Freeman warned against the tendency to group all entrepreneurs as the same, when in reality many actually owned their own businesses through necessity rather than through choice.
Asked how young people could be rewarded for their enterprising activities, Willie Bain MP suggested regional banks would have more success in their abilities to lend to SMEs. Cutting SME business rates was also important, the Business, Innovation and Skills Committee member added.
He believed government’s role was a mixture of tax policy, education policy, and support from local enterprise partnerships.
Advice
A student in the audience asked what advice could be given to young enterprising people today.
“Be ambitious; remain ambitious; but grow within your limits” said Sharkey. A huge number of SMEs that went bust were actually profitable before they did, he explained, because they were attempting to grow faster than they could.
Bain and Freeman both advised students to think globally and consider the possibilities of developing innovative both services and ways of selling services.
“You’ve got to be really passionate” said Lord Mitchell. “You’ve got to be prepared for the fact that you don’t succeed. If failure will destroy you as a person, don’t do it.”
“You have got to look into your own soul, to decide that you want to do this, because it is not easy.”
“There truly has been a change in attitude” around entrepreneurship, Lord Mitchell said. “This country is brilliant at it and getting much better. If you go to Europe, they are useless at it. We should be very proud.”
Luk criticised the sometimes accepted wisdom that young people could not be leaders. If they wanted it badly enough, they could achieve great things, he said; “Go for it.”