Alternative Title: ‘Billionaires, bullshit and balderdash’
I have just watched my old Beverley Grammar school friend, Jim Ratcliffe, on television. As veteran business owners, on different planets regarding business size and earnings, it can be fun being old. I’m sure that Jim gets the whispers I get that we’re past our sell by date but, hey, no-one can sack us.
He looks as fit as when we went on cycling holidays over 45 years ago. Jim was described in my paper this morning as ‘the billionaire petrochemicals tycoon’. As the majority owner and chairman of Ineos, he was on television explaining how the closure of the Grangemouth site was averted. What I liked was that he explained very complex business issues in terms that everyone could understand. There was a complete absence of spin and bullshit.
Grangemouth makes it clear who runs the country.
However, I also realise that the Swiss based Ineos, the largest privately run company that operates in Britain, is perceived by many as having held an entire nation, Scotland, to ransom. It is the latest example of a major corporate doing what it likes knowing that our elected Government is outgunned – in money, lobbyists, lawyers, tax advisers and cojones..
There is no political willingness, from any party, to take on the rich and powerful. After all, the rich and powerful are getting richer and more powerful every month and most political leaders seek their backing to climb the political ladder and then end up in their employ, directly or indirectly, after they step down.
Another paper (Owen Jones in The Independent) said of Jim ‘The power exercised by the likes of Jim Ratcliffe depends on our collective resignation, a sense of fatalism and powerlessness. Grangemouth could be a turning point, a catalyst for other employers to demolish what remaining power and rights working people (including the self-employed – my addition) have. Or it could be a moment where enough of us realise what is happening to modern Britain and – in the finest tradition of this country – do something about it.’
Talking about a revolution?
My light bulb moment came from the phrase ‘rights working people have’. In the past when I’ve heard the phrase ‘workers’ rights’ I’ve associated it with employees taking action to get fair pay, fair terms and conditions of employment with safe and healthy working conditions.
Government, in order to back major corporates; talk about being ‘Employer led’. This means the bigger employers, in each traditional industrial and commercial sector, dictate what is in the UK’s sectoral, employment, training, welfare, and even taxation; policies, programmes and regulations.
I realised that this Government and large employers against employees and the unemployed battlefield is not where the action should be to ‘do something about it’. It is, frankly, old hat. Within the next decade nearly half the ‘working people’, in the UK, including those at school today, will be self-employed or business owners running their own micro enterprise (0-9 employees).
Large employers are in boom time regarding income but meltdown regarding the number of employees they have. Against this the number of self-employed inexorably grows – faster and faster- up 127, 000, in the last year, to 4.6 million. There are six times more self-employed and micro enterprise owners than there were 40 years ago. 1 in 6 working people are already self-employed.
The only people that can ‘do something about it’ are us – the self-employed and independent business owners.
Just a few days earlier Russell Brand said ‘I don’t mind giving up some of my baubles and balderdash for a genuinely fair system, so can we create one?’
Owen Jones and Russell Brand plead for change in how businesses are run so that there is more fairness. Yet they know that apathy, resignation and the sheer size of Brand’s ‘despondent underclass’ means that ordinary citizens, and certainly business owners who need to feed at any trough provided by Government and the Corporates, are not going to take anyone on.
It may be a quiet revolution – apart from me
I’ve been quite shocked by the vitriolic response to Russell Brand’s New Statesman article and interview with Jeremy Paxman. The difficult-to-spell and most-blokes-using-it-won’t-know-what-it-means word ‘vacuous’ sums up what most critics think about Mr Brand. They suggest that he’s an empty headed cynic trying to cause aggravation and yet has no plan about what to do.
Fortunately, I do have a plan and I’m happy to lead the revolution. The only problem is that most of those that I’ll be leading into battle will remain silent. There’s no better way to earn a living than having your own business but it is a really, really tough way to earn your living. Self-employed people and business owners simply cannot afford to upset potential or existing customers or suppliers by joining the revolution that I’m appointing myself the leader of.
I can be a pain in the backside to Government (all political parties).
My view is that the biggest corporates will not change their practices and that government will not stop backing the largest corporates either. However, Government can get a better deal for the money it gives these corporates.
Firstly, Government, can back the continually growing micro enterprise sector (the vast majority of which are self-employed with no employees) by, as per my petition http://www.change.org/en-GB/petitions/uk-government-stop-funding-the-corporate-thieves, negotiating better terms (e.g. ‘pay all suppliers within 30 days’ – current average is a criminal 68 days) for all Corporates that Government contracts with, either as supplier or as a beneficiary of funded support.
Secondly, it can create a cost base for business that allows the self-employed and business owners to; at least, achieve the living wage for their efforts. Everyone I meet from overseas says the costs, of operating a UK micro business, even a home based business, are far too high. Enabling lower energy costs, broadband, telecoms, business rates, passenger transport, fuel along with lower cost of compliance with regulations are all within the power of Government.
Thirdly, give all prospective and existing business owners the opportunity to gain the know how to survive and thrive. These three steps can create a modern business eco system that will deliver a fairer deal to all its owners, employees, suppliers and communities.
We now must live in reality (Russell Brand)
I hate meaningless business jargon and Americanised happy-clappy speakers. I much prefer listening to real business people like Tim Campbell, Jacqueline Gold and Kanya King. Don’t get me wrong I’ve read, watched and respect all the gurus but despite billions of people having embraced their message only a few achieve their ‘dreams’.
For example, the vast majority of America’s economic wealth and political power is in the hands of about one thousand families and none of them look like stepping aside anytime soon. Anyway, it’s a good thing I don’t attend, my faux namesake, Tony Robbins’ shows as with my lack of co-ordination and spatial awareness, with the fire-walking and tile smashing, I’d cause extreme chaos and injury to his delegates.
However, it is very important that we understand that the reality is that the wealthiest business leaders haven’t got there because of their talent in dream making, goal setting and a positive mental attitude but by other means. This is important because anyone suggesting ways to change the business eco system, and I’m particularly thinking about me, is going to be criticised as being a negative, past their sell by date, maverick, failure.
Making deals – honest or not – makes the money
Jim Ratcliffe isn’t likely to appear at Wembley Arena as a motivational speaker or on the telly as a celebrity endorsee to flog Government Start up Loans (I’m so worried about Start up Loans), but he explained business for what it is – common sense. The basic business principles at play apply equally to someone self-employed, with no employees, as 75% of all businesses are, right up to the 6 Big Corporates that dominate each sector.
Except that small and micro businesses, predominantly, make their money from satisfying customers and suppliers and their local community whereas many of the very largest Corporates now do it by ripping off their suppliers and customers, price fixing, gambling, settling when they get caught, paying fines as a cost of doing business and sloshing around in Government money to support them. This allows them to make their ‘loadsa dosh’ to pay their executives piss-taking, pay and perks packages. I don’t blame the corporate executives as they are doing what modern corporate business is there to do. But, I do blame Government for allowing it to happen when they could level the playing field through budget allocation and negotiation. See my petition http://www.change.org/en-GB/petitions/uk-government-stop-funding-the-corporate-thieves
Rant over. I will add Jim to my long list of mega successful business owners I’ve met that I believe all share one key enterprise skill. That skill is deal making. Over time, there are many functions within the business that the owner will delegate or contract out, but, in my experience, negotiating the important deals is something they continue to do.
The Enterprise Skills Set
Making deals is one of six, generic and essential enterprise skills that through research, and my experience of working with many hundreds of start-ups and business owners, I believe are necessary for a successful enterprise. The other five are: managing cash flow; winning and keeping customers; pricing; test trading; online and off-line collaboration/networking.
Of these six enterprise skills the easiest one to teach in schools, colleges and universities is making deals-negotiating. Win-win negotiating skills allows the prospective business owner to seek and seize opportunities, sell for the best margin, buy for the best margin, develop multiple income streams and get the best return on all assets, including people.
It is also a skill that is a great confidence booster. This is very important in a start-up where sometimes it seems the whole world is trying to sell you stuff, including the Government and the Banks, or rip you off. The other five skills should be taught at school too but they are certainly best developed ‘by doing’ in the context of the specific business that you have started and are running.
Learning from other business owners
All of these skills and the common sense practical know how needed to succeed are best gained from other business owners – people who have got the T-shirt for starting and successfully running their own business.
I’m very fortunate that throughout my 28 years of being my own boss, I’ve had a business partner, Clare Francis. Between us we now have this enterprise skills set. In fact I realise that I’m incredibly lucky to have built businesses with three fantastic women business partners who had all learned their enterprise know-how from one or more of their parents. This wasn’t planned.
In fact, when Clare and I, in 1986, left very well paid jobs to start our business, which is still running today, we naïvely thought that all the management training and experience we’d had from different sector leading corporates would be of value in our business. We had post- graduate business diplomas and I’d been Chief Executive of a £20 million company. These business qualifications and executive experience proved totally useless, as was the start up advice we were given by an ex-bank manager.
Thank goodness that Clare always held the money as we’d have had an early demise if we’d spent the little money we had on my marketing ideas. Fortunately, eventually, we realised we did have a fall back reference point as both Clare and I had fathers that started and ran their own businesses which we’d been involved with.
Rocking Enterprise Families
Then in 1996 Clare and I founded an organisation to improve start up training and support in the UK called SFEDI. It grew into a substantial social enterprise but in 2004 it all went desperately wrong, no fault of the staff. So Ruth Lowbridge, one of the non-executive directors, and I had to start again from scratch with it as we had to make all the staff redundant and vacate our premises. Ruth was a successful small business owner and her mother had started a successful small business too.
In 2012, Tina Boden and I co-founded the Enterprise Rockers CIC – a network of business owner networks. Tina had been a business owner straight from school and her parents had run their own businesses all of Tina’s life. Tina credits me with persuading her that she didn’t need to waste her time on a business degree and I credit her with being the most skilled business owner I’ve met who achieves more in a morning than I do in a week.
You can see from the above why we founded the free to join in Enterprise Rockers band. Apart from having a passion for micro enterprise (0-9 employees) Tina and I are convinced that business owners will survive and thrive if they are in a self-help community of business owners. It can be the difference between 2 out of 3 start-ups closing within 3 years and 4 out of 5 continuing trading.
The Enterprise Rockers Community is nearly two years old. It is, we think, the only global community of micro enterprise owners that is totally independent of government and corporate sponsorship and funding. All the money that has been put into it has come from Mrs Boden and me. All the effort to create it, so that everything is there that a business owner needs to survive and thrive, has been provided by volunteers – Rockers, Band Leaders and high profile, Head Roadies.
Stop Pouring Government Skills and Business Support Funding Down a Corporate Drain
Let’s go back to Grangemouth and Jim Ratcliffe, the Chair and Owner of Ineos. My guess is that a third party will have been involved in the negotiations to re-open Grangemouth. The third party with Ineos, Unite (the trade union) will have been UK Government. Jim may be regarded as reclusive, some say secretive, and shy but he will not have been afraid to ask Government what they would do for Ineos in order for them to re-open the plant and invest £300 million in it. After all, Jim faced 600 bankers not so long ago to ask them to cut him some slack with his mountain of debt.
Government would have mentioned the funded programmes they had on offer and my wild guess would be that one of the offers they’ll have made to Ineos would be money for up skilling the workforce. Government have consistently, through the last twenty years, spent most of their support to business in the form of skills training funding, including apprenticeships, for major employers. The theory is that increased skills lead to increased productivity which in turn leads to economic growth.
I don’t have problems with the theory but I do have problems with the way they allocate the skills funding training. It is lazy, politically expedient and has not created jobs or growth. Most of it goes to the large corporates in each sector for them to do the training they should do anyway, at their own expense.
A year ago we had the scandal of McDonalds spending £10 million apprenticeship funding on existing employees – not one new employee. In fact £20 million was shared across 9 major employers and created only 2559 jobs. Just a week ago we had the scandal of the training provider, Elmwood, which has received £100 million of Government funding to provide free training, going into administration.
This is because it is being investigated for major fraud – claiming funding for trainees that didn’t exist. This led to its one major client Morrisons Supermarket, which was training their existing employees, to change provider. Morrisons and McDonalds usually win a National Training Award at the annual ceremony I’ve been lucky enough to attend but I’d rather they had award winning training which hadn’t been funded by taxpayers. BAE is the latest example of an exemplar government funded apprenticeship provider to cut jobs rather than make jobs.
Skill up the Enterprise Sector
My point is that the large employers are not where the economic growth from skills funding will come. I’ve never understood why they get all this Government funding. The new jobs and the new growth is coming from a sector that Government, despite my campaigns for 20 years, do not officially recognise – the micro enterprise sector including all start-ups – 95% of all UK businesses..
If the owners of each of these enterprises don’t learn how to start and run their own business from working with business owner parents like Clare, Ruth, Tina and I did – where do they get this practical enterprise know-how from?
A high proportion of the Government’s skills funding should be going on prospective business owners, including the self-employed, training and support. They don’t do it because it’s easier to get targets achieved and the money to a small number of large employers. The CBI would self-combust if government money went into the micro-enterprise sector.
Micro Enterprise is now and the future
I contend that it is very important for the UK to get serious about providing enterprise skills and know how to all starting up business owners to reduce mortality rates. There are six times more micro enterprises in the UK (4.5 million) than when I was at university. This includes all start-ups, 500,000 a year with 6% of all start- ups becoming substantial businesses. The more that survive, the more substantial businesses there will be.
On top of that corporate jobs are in meltdown. Nearly all the new jobs, self-employed and employed are coming from the micro-enterprise sector. There are 127,000 more businesses, micro enterprises, in the UK than a year ago. The number of start-ups increases year by year because there aren’t the jobs.
By 2020 it is forecast that 50% of the big corporates/large employers’ tasks will be contracted out, including to micro enterprises and self- employed/freelancers. Nearly all my micro enterprise owner friends already use VAs and freelancers from such as People per Hour. Most do not intend to take on more employees and much prefers to collaborate with other self-employed and business owners.
Enterprise not ‘Entrepreneur’
So you can see why I believe this enterprise skill set is vital. You’ll notice that I haven’t called it an ‘entrepreneur’ skill set. This is because the media, the business opportunity industry and the Government have made the term entrepreneur associated with size of business and wealth being the measure of success As such it is only the owner-managers of ‘SMEs’ that Government are willing to train.
Conversely, most micro enterprise owners see running their own business as the best available way of earning a decent living – not building an empire or gaining extreme wealth. Unfortunately, since Thatcher, Major, Blair and Mandelson showed the way for politicians to become multi-millionaires most politicians assume any business person or celebrity that is rich is an entrepreneur.
Thirteen years ago, with a number of business owner colleagues under the leadership of Sarah Anderson CBE and the late Linda Ammon, we managed to get £60 million Government investment into the training of business owners. Unfortunately it was classed as leadership and management training and so constituted business and strategic planning skills and entrepreneurship training which often resembled the lessons learned from wealthy business leaders. So it didn’t touch on the ‘Be Your Own Boss’ enterprise skill set that I’ve described and know is necessary.
Fabulously successful micro enterprise owners – but not rich
Everyone that starts and runs their own business is a fabulous success but most people in the policy making square mile regard people like me as ‘failures’ or ‘lifestylers’. I’ve even been asked if I’m a millionaire and when I’ve said ‘No’ they’ve replied ‘I can’t have you in my circle as I only surround myself with successful people’. How stupid is that! Yet almost every self-improvement book and seminar says surround yourself with 5 or 6 seriously successful people and ditch those that aren’t. To be fair it’s only been blokes that question my worth – the same blokes that assumed Clare was my wife or PA rather than my business partner – and Clare has been a millionaire as long as I’ve known her – from her father’s business.
My wife, Eileen, has always been cynical about ‘entrepreneurs’ and has loved her jobs as a librarian and I’m really glad that I didn’t take the Napoleon Hill, Jim Rohn, Tony Robbins and Brian Tracy type advice to have this immediate network of a small number of successful people and move away from those that do not share your vision. Eileen has been fabulously successful in all she’s done it’s just that wealth creation has never been a primary goal – as it isn’t for 95% of business owners in the UK.
I also got a tad disillusioned with some of the ‘collateral damage’ of the leadership, motivational, positive mental attitude and dream building speakers when I was Chief Executive of Amway (UK). Their creed as to what a ‘winner’ looked like and how they behaved placed me under extreme pressure from my bosses to ditch my favourite light brown suit and shave off my beard. It also meant I had to bargain with Eileen not to say what she felt about many of the multi-level marketing ‘leaders’ who had cars, houses, jewellery and a lifestyle that they really could not afford.
The UK must try the Micro Enterprise Way
The enterprise skill set should be taught, by business owners, to everyone starting a new business in the UK. This can be achieved by a public money/private sector partnership. All the local and online enterprise communities, networks and, even, the new breed of hubs (like WinWeb Hubs, Workspace and Virtual Office providers, modern Enterprise Agencies) can provide the learning in places where prospective and new business owners already trust and go to. It will improve the survival rate and increase the growth rate of enterprises in the UK.
However, there is another lesson that Jim Ratcliffe gave us in his interviews about Grangemouth this year. That is that businesses will not survive unless their cost base is low enough. UK Government have made the average earnings of micro business owners go so low in the UK that half of them are earning below the living wage.
Not only shouldn’t Government continue to fund the large corporates (see my petition) that have unfair contract terms with their small suppliers they must also do something about them ripping off their self-employed and micro enterprise customers. Energy, fuel, telecoms/broadband, rates, cost of compliance with regulations must all go down if we are to create an Enterprising UK.
A new and enterprising reality
The final word I’ll leave to Russell Brand who made the news this week. ‘Along with the absolute, all encompassing, total corruption of our political agencies, apathy is the biggest obstacle to change’.
My revolution is a micro enterprise revolution. I, as the leader, solemnly declare that I will do all I can, for the rest of my life and beyond, to aid the empowerment of the UK micro enterprise sector.
This means that my revolution must ensure the micro enterprise sector gets the support, skills, know-how, cash flow, regulations, taxation and cost base to survive and thrive. My revolution will ensure that all those in the micro enterprise sector spend at least 25% of their weekly personal and business shopping with other independent businesses. My revolution will ensure that all companies in receipt of government support and funding pay their suppliers within 30 days and their employees the living wage.
The success of the micro enterprise sector will shake the UK out of its apathy and provide the jobs and economic growth that will lead to a much more vibrant society, better local communities and a much fairer distribution of wealth and greater equality of earnings.
Copyright Tony Robinson OBE – November 2013