Are local governments doing enough to support entrepreneurs?

New research has revealed that entrepreneurs think local government support for their businesses is getting worse, with 70 per cent of UK firms saying it’s not good enough.

The Business Census 2017 report reveals that the number of businesses unhappy with their support from local government has gone up by 10 per cent in the last year.

“The Business Census lets us ‘take the temperature’ of UK companies to understand the big challenges they’re going to be facing and focusing on during the next 12 months,” Katie Deverill, author of the report for Company Check, said. “What is striking is the growing disaffection with local authorities when it comes to supporting and nurturing business growth. The Government should take note of these figures and recognise that something in the current system just isn’t working.”

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The current system not working is an opinion that resounds loud and clear from numerous entrepreneurs that we spoke to.

“We haven’t received any [support], but we have definitely tried!” Matt Quinn, founder of Flex, says. “Last year we were trying to reach the council run parents and fitness groups to offer free use of Flex which has a proven record for increasing a persons activity. The few we reached pointed us to a local councillor.

“We then met with the councillor who couldn't have been more patronising, refused to make an introduction and suggested we apply for a £300 grant.”

Sara Tomaszewska, founder of Little Media Bureau, had a similarly frustrating experience when she reached out to her local authority for some support. “Starting up was quite difficult because I completely had no idea what I’m doing and there was absolutely no face to face service available,” she says. “Finally I received some advice from a government body however it was available only via phone. I was told how to set up a company and basically how to get started, which helped me a lot. I did also enquiry about any funding however I was advised to look online.”

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She says that she would have preferred to speak with someone face to face, rather than over the phone. “It would be so much easier if someone could help me with a business plan and point me into the right direction. Most companies send you online but the problem is not everything online is that straightforward,” she says. “It kind of feels like you are completely on your own and you have to figure out everything by yourself. Small businesses fuel the economy but there are no benefits for us. No holidays, no sick days and frankly quite limited support.”

Another complaint that many small business owners have is how the nature of tendering for contracts with local government often favours larger businesses, even though working with local companies would support the economy in their area.

Lawrie Jones, founder and MD of 42group, says: “As a small business we want to grow, and winning contracts like these would be beneficial to us. But, the problem is it’s very much a closed shop. Government support for business is often targeted at large businesses, not SMEs or start-ups.”

Of course, not all businesses have a negative experience working with local governments and Luke Massie’s Vibe Tickets has recently received a £5,000 investment from Lancashire County Council. However, even he says that the support could have been better. “The growth of the tech and digital industry creates a need for young people to be sitting on boards,” he says. “This is crucial to keeping businesses within the regions of their local governments and away from the lure of big cities. There is very little balance of people who are hands on, working in the sector. Having people that understand and work in these industries would automatically create better support for these kinds of businesses.”

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So what would these entrepreneurs like to see from their local governments?

Tomaszewska says that in an ideal world there would be a wealth of support for businesses in their first year. “There would be free face-to-face advice and free appointments with a solicitor, an accountant and a marketing specialist,” she says. “The first year of running a business is the hardest and having someone to watch your back would be nice.”

Quinn suggests that authorities could benefit from having an entrepreneur in residence – “someone thoroughly networked through the local area who can connect businesses and make introductions”.

He adds: “I’m cautious to suggest anything that will add to the burden of bureaucracy but having one person do office hours who you can book for 30 minutes to ask for directed help and introductions would go a huge way for me. There is virtually no financial downside, and good networking can be invaluable to a smart business.”

Massie, on the other hand, thinks that local businesses should make more funding available to entrepreneurs. “Local governments should have a pot of money, accessible to start-up businesses that can prove they are going to fill a gap in the market,” he says. “Or are providing a product or service that is valuable and has the potential to succeed, can show they will meet the needs of their audience and/or customers, and are financially viable.”

Jones recognises that “cash-strapped local governments” are unlikely to be able to afford this kind of financial support but says that small businesses could benefit from space to grow. “Government-backed incubation space would be a great benefit to SMEs and entrepreneurs. Not only does it reduce fixed costs, but being surrounded by other new businesses – often in exciting and challenging fields – can stimulate new ways of thinking and working.”

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