By Georgia Kirke
“A shopkeeper was dismayed when a brand new business, much like his own, opened up next door and erected a huge sign which read ‘BEST QUALITY’.
He was horrified when another competitor opened up next door on the other side, and announced its arrival with an even larger sign, reading ‘LOWEST PRICES’.
The shopkeeper panicked, until he got an idea. He put the biggest sign of all over his own shop. It read ‘MAIN ENTRANCE’.” Source: Quora, Mar 2017
Enterprise, put simply, is a skill. It is a person’s ability to create a product or service, often out of nothing but passion, grit, and a bit of creative thinking, and then support it with systems and processes which lead to profit. It’s innovation. While that makes it sound fairly straightforward (ish), it seems to be a source of great mystery to the majority of us with many people associating it with Branson-esque stereotypes, or Wolf Of Wall Street caricatures. The more ‘down to earth’ types include those so-called social media gurus, vloggers and trendy techies who have created an app, moved to San Francisco and had it valued at £20 million all in 12 months – hardly a representation of the average human.
Then you hear that only 50% of all new businesses survive more than 5 years and it just seems that to be successful in business you need to be some kind of super-human. Entrepreneurs buck trends and invent their own rules, which makes them seem weird. School provides absolutely zero information on how to survive without the syllabus, and the statistics out there are enough to dampen to brightest of spirits. And now, even if you get past all that rubbish and become one of the mere 15% who set up as self-employed or a small business owner in the UK, on top of all these things that make entrepreneurship so challenging and risky, Philip Hammond arrives on the scene and at the first chance he gets, alienates the lot by increasing taxes for small business owners with the Spring Budget.
In his Forbes article on the topic as the Budget is released, David Prosser quotes Alex Henderson, a tax partner at PwC, as “just one analyst who thinks this may be short-sighted from an economic perspective. ‘A key feature of the tax system over the last 40 years has been to incentivise entrepreneurship, recognising the risks that come with self-employment; by helping businesses to grow and employ people, governments reap greater tax revenues in the longer term,’ he says.
“‘Many business owners will be concerned however that they are now in the Chancellor’s sights for the remainder of this parliament. While the Chancellor’s logic about removing anomalies in the system is hard to fault, it has an emotional effect on self-starters – the very people the Chancellor most needs to rely on. My worry is that the Government will continue to look at the entrepreneurial sectors of the economy for the tax rises it needs.”
It is hard enough for many people to picture themselves as an entrepreneur or see it as a viable career option. There are huge financial and emotional risks involved. The self-starting nature of the true entrepreneur takes on this risk in the pursuit of their business’ growth objectives (which often involves creating jobs for others and adding value to the lives of their clients), so for the Chancellor to actively make it harder for people to take the leap is tough to get one’s head around.
Why then do I, and thousands of others who’ve already made the leap from employment to entrepreneurship and would never go back, swear that it’s not only accessible to everyone and could solve unemployment, but that it’s also the key to solving every major issue on the planet?
Let’s look at some interesting dichotomies we’re all faced with these days. We’ve got record levels of youth unemployment and debt, with many large companies who traditionally employed graduates still guarding their budgets with a recession-worthy grip. We’re seeing a huge increase in social mobility, with more people than ever travelling the world and expressing a desire to work flexibly and independently. People no longer look for jobs for life, but rather whatever jobs they can get that support their life goals.
We’re politically divided and under pressure in our own back yards, yet social trends indicate a desire to come together on a more global level. And we have rapidly increasing technological developments which simultaneously threaten and save lives (think robots taking all the jobs vs. the eradication of Ebola, nuclear warfare vs. space tourism, singularity vs. free housing and food).
With all the changes and developments we’re currently witnessing, it is no wonder so many people are confused, annoyed, bored and looking for alternatives when it comes to their careers. Well actually everything, but let’s focus on careers. More people than ever, of all ages, backgrounds and genders, are fed up and ready to stick it to the man. And this is where entrepreneurship comes into play. This is why it is so vitally important for all of our futures. The future of our planet, not just Generation X or the Millennials. Entrepreneurship is sticking it to the man.
Affected by unemployment and debt? When you’re an entrepreneur, you give yourself a job. You are your employer. Want to work independently of location or ‘company policy’? Start your own company. Work from home. Work from a beach in the Bahamas. No-one can tell you not to – it’s your life and your choice. How about a job you love that supports your life goals? Sick to death of recruiters and writing cover letters only to get repeatedly rejected? Create your own job, based on your passions and interests, and feel 10 times more satisfaction when you’re able to use what you love to create value for others and get paid for it.
Hate being confined to an office, seeing the same faces day in day out and wish you were more connected? When you can choose your clients and with all this glorious, free technology that allows us to talk face to face despite being on opposite sides of the world, you could forget that Brexit is even happening. And who created that technology, and the robots who are taking all the jobs, and the apps that let us chart our diets and sleep rhythms, the cars that drive their owners to the hospital when they have a heart attack at the wheel? It’s all down to entrepreneurship. As we all become more disgruntled with the world that’s provided for us and start to look for alternative ways of living, more and more people are turning to entrepreneurship.
When you look at what enterprise is responsible for, so much of it is good. So many of the people who are now millionaires and billionaires started out with nothing. They used their unique strengths as natural advantages, turned their passion into purpose and executed a vision that the rest of us couldn’t even conceive. The created their own opportunities. And they fail along the way but rather than decide, ”Oh dear, I tried, but now I’m just a statistic that puts other people off trying”, they see failure as an opportunity to learn and pick themselves up and try again. And when dealing with the likes of our misguided Chancellor, remembering this is crucial.
The truth is you don’t have to be or want to be a millionaire or billionaire to be an entrepreneur, or to out-wit Hammond’s briefcase. You may want to earn a nice living for you and perhaps your family while retaining your freedom and living more on your own terms. It is simply about your ability to create a product or service, and then support it with systems and processes which lead to a profit off which you can live. Your profit might be financial, or it might be more about impact or another type of multiplying effect. It’s whatever you decide you’re going work towards.
Many politicians certainly don’t help the normal folk, that can be true. If you are of the latter persuasion and don’t want to risk your health, relationships, finances, security and all-round sanity by building the next Tesla or Microsoft, then a reduction in tax-free dividends from £5,000 to £2,000 is going to hurt. It will result directly in less income for the limited company owner. He will probably say in his defence that corporations tax rates are coming down from 20% to 17%, meaning post-tax profits will be higher. There is however a big difference between your money and your company’s money. You as an individual are not necessarily going to enjoy that extra 3%. And while we’re at it, moving the self-employed towards the same tax as the employed might sound good to those who have never been self-employed, but before politicians start making decisions on behalf of 5 million businesses, they might want to consider the other perks employees enjoy (including themselves) that we lowly business owners do not. I’ll take 4 weeks at full pay if it’s going?!
But here’s the flip side. While enterprise and it’s expanding place in our society and economy can be confusing, with little support and advice out there it can also be scary, and while it can certainly be tempting to wait until…a new Chancellor?! The very nature of being your own boss is just that. You are in charge. Not Hammond, not the rest of the government, not the banks and not the business next door with the bigger sign. You. You get to decide what it is you can do that other people will pay you for. You get to create your own opportunities. And while it’s a pain, you also get to think about what changes you can make in your business that make these tax increases look like small fry.
It’s true that the days of a career for life and security in the traditional sense are over, but more exciting times are here instead. It’s just about not being average. Average is doing what most other people are doing. If you want to start and grow a business, you can’t afford to take that approach. Entrepreneurs, in order to win, are not able to be average. They must be different in order to remain competitive and if they stagnate or follow the crowd, they fail. Entrepreneurs don’t wait for anyone’s permission, or for the government to listen to them or for other people to help them. They just go out and do. Enterprise will win because it thrives off growth, creativity, passion, purpose and vision. Innovation. A future outlook. All qualities, it’s fair to say, the Chancellor’s budget does not.
If you are interested in entrepreneurship but don’t know where to start, here are some resources I find useful:
Or feel free to send your questions to me and I’ll get back to you as soon as I can: email@example.com
Georgia Kirke is Director of Enterprise for Parliament Street