A sign of a truly healthy economy is a vibrant entrepreneurial scene, with companies starting up, employing people and rebuilding areas of cities.
Two excellent examples of this are: the revival of East London – where over the last decade places like Shoreditch, Hoxton and Old Street have found distinct energies; and the redevelopment of Manchester, Leeds and Birmingham – where new companies, restaurants and buildings have sprung up, creating jobs and a new sense of community.
One of the best policies of UK’s current government has been the introduction of the Start-Up Loans scheme. It has provided fuel for the UK’s recent entrepreneurial boom. Originally aimed at university aged students, In just three years the Start-Up Loan Company has expanded to take on all ages, and has lent more than £140 million to 27,000 businesses across the UK.
Wherever I travel I promote this idea, explaining that responsible governments should follow the UK’s lead with similar sorts of investment in new businesses. Governments should provide the finance and energy to foster a new generation of entrepreneurs and open markets for them to compete in.
But this is just the start, and with the UK election only weeks away, I strongly encourage politicians to focus on how they can harness the early work of Start-Up Loans to create a dynamic environment for new business and investment to prosper.
Based on my experience over 50 years as an entrepreneur, and through the work of Virgin StartUp, I have laid out a five point plan that I feel can positively inform the policies of the government to produce leading global businesses of the future:
1. Prime the pump
The UK needs to promote Start-Up Loans further and put more investment behind new loans. It needs more ambitious targets over the next five years to create the pipeline of new ideas and ensure it reaches all parts of the country.
The government should also look to create a series of events to promote start-ups. A great example of this is Virgin Media Business’s Pitch to Rich competition. Aimed at finding and supporting innovative start-ups, the competition is putting on five events across the country to promote business growth in the UK.
2. Build early support
Founding a business is not easy and the first years are crucial to success. Too many companies fail through an inability to manage their growth or the failure to secure big company orders. Government and local councils have increased their spending with start-ups and SMEs, but they must do more to help. Big business should also buy from and support growing enterprises more.
Virgin Trains, Virgin Active and Virgin Money have started to work with more start-ups, buying from them and providing mentoring and advice to entrepreneurs.
3. Help them fly
As these growing companies develop, many will look to grow overseas and will need more help to translate their business into new markets. In the early days of Virgin Records we found local partners to help us grow.
Today, government could play a more active role in developing these business interests abroad and help fledgling businesses make connections and gain expertise. Plans to expand UK Trade and Industry’s activities and organise more trade missions are on the cards and should be encouraged. This will help accelerate SME business growth and promote these companies more formally in new markets.
4. Create the space
Finding good locations and office space is often a problem for early stage businesses. The government could look at developing its own land bank to guarantee some more affordable central locations. Shared office spaces, with strong broadband connectivity, that are close to key markets can make all the difference to a start-up.
The current government got behind the creation of Tech City in East London, the next one must ensure we create similar hubs in cities across the country.
5. Follow up finance
A Start-up Loan is just the beginning. Virgin StartUp have helped almost 600 businesses get early financing, but are now focused on supporting the next round of financing through further loan schemes, crowd funding sources or traditional angel investment and private equity.
In the same way as the Start Up Loans scheme has been packaged to make it accessible for entrepreneurs, the state British Business Bank and its Help to Grow scheme should be made more visible, particularly in its support of follow-on financing. More than a million new firms have been created in the past five years, but funding their growth remains a problem. There are myriad regional funds and some government schemes aimed at growth businesses; however, too much of the support is not connected, is poorly publicised and lacks national awareness.
I believe that if the government addresses these five points that we will have a great chance of finding the Virgins of the future.