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The Enterprise Fairytale – InBiz Style

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If you’d like to manage your work around your life, self-employment may be the answer for you. All it takes is a bright idea and the determination to succeed.

InBiz – advert in RAW Magazine and TMP Website (emphases are mine)

This is another one for the Advertising Standards Authority in my opinion.  The implication that all you need is a bright idea and some determination and “hey presto!”.  Anyone can surely muster these resources?  The implications of such a message are both absurd, hurtful and unhelpful.

  • No hint of risk or downsides to self employment
  • No hint of the challenges involved in succeeding at self employment in an increasingly competitive environment.
  • No mention of the tensions and strains that a decision to go self employed might put on relationships with families and friends – or how it could end up in increased debt.

A naive and incredible appeal to the hopeless, the gullible and the many who are referred by the Job Centre at pain of losing their benefits entitlement if they don’t give it a go.  After all it only needs a bright idea and the determination to succeed (subtext “What IS wrong with you people?).

Of course I understand why we do it.

It works in the short term to get people through the door and onto our programmes so that we can trigger payments from funders.  Until of course the truth about this brand becomes widely understood.  It might work for a minority but for most it will be yet another false dawn – simply adding to feelings of learned helplessness.  But then we just repackage and rebrand the offer and it is BIG Business as usual.  If these services are so very good, and all it requires is a bright idea and some determination then how come the worklessness problem is so persistent?

We must start to be much more honest with people.  A bright idea helps.  Determination is good too.  But it might also take months or years of skill development.  Hours and hours of hard graft pushing for business and dealing with customers.  A credit history that allows you to borrow and invest at the right time.  A degree of financial literacy to ensure that you are not ripped of by lenders. Family and friends who are supportive and understanding.  A resourcefulness and resilience to get through some really tough times. And in my experience a lot of luck too.

Self employment is a double edged sword.  For some it transforms their lives for the better.  Much better.  For some it becomes just another attempt to get off benefits.  For some it results in serious indebtedness, misery and worse.

Until we start to build an honest dialogue with people that we purport to help about the nature of our products and services and provide long term, skilled, person centred support that mobilises the resources of the community to help people to make progress then I am afraid we are likely to make little impact on JSA figures.

(With thanks to Charlotte for pointing out this line.)

My Favourite Enterprise Podcast…ever

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While many businesses pay lip service to the idea of environmentally responsible practices, Patagonia has defined itself by “inspiring and implementing solutions to the environmental crisis,” says Chouinard.

The company has pledged that by 2010, it will to make all of its clothing from recycled and recyclable materials. Chouinard says that he would exit the clothing business altogether rather than compromise his standards.

Patagonia takes many steps to control its growth, such as drastically limiting its catalog distribution and not taking the company public in an IPO.

Chouinard even encourages his customers to buy less and focus on their needs rather than their wants. He insists that every time Patagonia invests in the environment, he sees an increase in the company’s bottom line.

Check out the full podcast here it is well worth the effort.

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Chris Grayling ‘Army of Entrepreneurs’ Proposal

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Every business start-up has a cost, and if you’re on the dole you can’t easily afford to buy basic equipment. At the moment the only start-up cash available from the “new deal” for unemployed people trying to start a business is £400. We don’t think that’s nearly enough, so we’ll give the business start-up specialists the ability to fund costs of up to £2,500, and then reclaim the money from the benefits saved once the business is up and running.

Chris Grayling – How to Lift the EconomyWith an Army of Entrepreneurs

On the face of it this looks like a great idea.  The logic is both simple and compelling.  Startups cost money.  People don’t have it.  Let’s give them it, funded out of future benefits savings.

Several reasons why I think this might not work in practice:

  1. It will attract a lot of people to the £2500 who are not sufficiently committed to enterprise and self employment – enterprise professionals will spend hours of their time wading through the sharks to find the genuine latent entrepreneurs.
  2. It will encourage some people into enterprise for whom it is almost certainly not the best option – business failure rates are likely to increase with this type of soft start-up provision – damaging the enterprise culture in the medium term.  Only if we use robust investment criteria will this be avoided.  This means turning a proportion of applicants down – leading to bad word of mouth.
  3. If business ideas are viable they will find investment – the problem is still not lack of cash – it is lack of investment ready business plans.  Let’s spend our money here on providing inspirational coaching and good technical advice (NB there is already plenty of technical advice out there – labeit patchy in quality)
  4. Sources of funding and sources of advice need to be kept separate.  It is too easy to tell the funder what they need to to hear if they are to release the money.   You MUST be able to speak the unvarnished truth with your advisers.

There maybe ways to overcome most of this stuff.

However IF the only reason a business gets started is because of a £2500 gift from the government – offset against future benfits savings – then I for one would worry.  Unless there is real commitment, passion, talent and skill to invest in I can see lot of cash going down the tubes.

Your thoughts?

Enterprise Lessons from Jim Sinegal Costco Founder

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Jim Sinegal founded Costco 25 years ago.

This is a great post capturing some of what Jim learned about management, enterprise and entrepreneurship along the way.

Full of wisdom!

Shows that if you set up a small business in the right way – it can become massive.

When the Business Idea Just Will Not Work…

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Pet Rocks

I am currently putting together a professional development programme for people who provide a range of ‘enterprise support services’.

I am trying to establish the challenges that they face and where professional or service development support might help. One of the commonest problems reported is that of helping the client to recognise when their business idea is just ‘not viable’.

The implication of this is that as ‘professionals’ we know whether a business idea can or cannot be made to work. We understand the financial dynamics of the business and the marketplace and we can foretell the future – absolutely. The challenge is how to get the client to recognise what we already know to be true.

  • Do we just tell them that we know the business won’t work?
  • Or do we carefully lead them to the same, ‘obviously right’, conclusion.
  • Or do we recognise that our beliefs could be wrong and focus on helping the client to develop their own business idea free of any negative bias from us?

My guess is that there are many, many very successful businesses that would never of started trading had their adviser not carefully and skillfully pursued this third option.

For example there is this company that sells tumbleweed (‘I would just like to talk to you about an idea that I have for a business. You see all these weeds that are blowing across the prairie? I reckon I can sell them mail order over the Internet….’). Any takers for the first Dandelion Emporium or Himalayan Balsam Wholesaler?

  • Then, closer to home there is this company that makes haute couture for ferrets.
  • Then there are doggles (goggles for dogs),
  • And a guy who will sell you a ‘pixel‘ on the Internet for a dollar (don’t laugh, he has sold them all and made his million!).
  • Or this company who make plastic ‘wishbones’ so there are no more fights over who gets the wishbone (does anyone still do that?)
  • Or this company who sell plastic balls to go on the end of your car aerial and make them look pretty!
  • Or the pet rock company that started in 1975 and swept the planet!

The big lesson for me has to be that it is impossible for us to ‘know’ whether a business idea is viable or not.

Some real stinkers have made millions and even more really great ideas have bombed. Learning to recognise and set aside our own prejudices and beliefs so that we can help the entrepreneur to explore and develop their business idea and manage there own exposure to financial and psychological risk must be an important professional development goal for many of us.

There is a link here to my earlier post on barriers to enterprise. ‘Adviser negativity’ surely has to be added to the list!

Let me know your favourite ‘business ideas that should never of worked’ so we can grow the collection.