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More small business support is needed, say RSA

As part of The Entrepreneurial Audit (a joint project from the RSA and Crunch) twenty policy ideas have been proposed to strengthen self-employment in the UK. A large section of the report looks into the small business support and advice available to the self-employed, and what can be done to make assistance more readily available to those who need it.


The self-employed are considerably less likely than employees to access training, with 19% vs 33% of employees taking part in the past year. Sadly there is a lack of recognition among business owners that they could benefit from training, and much more can be done to ensure that tailored support is easy to obtain.


Several specific recommendations on this subject were made.


 


Evaluating small business support


While millions of pounds are invested in business support initiatives (for example advice and coaching), many of these aren’t evaluated to a high standard, meaning that the Government risks wasting money and repeating mistakes that could have been avoided.


The Entrepreneurial Audit advocates the creation of a permanent evaluation centre to monitor, coordinate and disseminate the results of evaluations of business support schemes, such as the newly implemented ‘Local Growth Hubs’.


In addition, the report suggests all new major business support schemes should be liable to a randomised control trial to ensure maximum effectivity. It argues that without such robust evaluation becoming the norm, we risk a Groundhog Day approach to business support, where schemes fail to learn from previous experience.


 


Making better use of existing training schemes


Another proposed solution is that large businesses should open up their employee training programmes to local self-employed people, possibly as part of their corporate social responsibility initiatives. Local Growth Hubs could connect their network of business owners with institutions that have such training programmes.


Of course, this would rely on the generosity and availability of these large businesses, and on the assumption that that their training programmes align with what the self-employed actually require.


 


Make more of accountants


Of the non-employing businesses who sought advice in the last year, 25% approached accountants for that advice, more so than general business advisers at 19%. The report ponders whether accountants could expand the existing role they play in advising clients to more general business matters, such as on marketing and exporting.


This would be part of a broader communications exercise by the accountancy trade bodies to raise awareness of these opportunities amongst the self-employed. Obviously, as accountants, we know we’re in a privileged position to offer support and advice.


 


A UK equivalent to the US Small Business Administration


The US Small Business Administration (SBA) has been in operation since 1953, providing loans, contracts, counseling sessions and other forms of assistance to millions of small businesses across the pond.


The UK set up a similar body called the Small Business Service in the early 2000s, however it was disbanded shortly afterwards, reportedly due to its limited influence and vague objectives.


The report advocates holding a public consultation on the merits of creating an updated UK Small Business Administration that would provide state-led small business support and a forum for shared learning for public, private and third sector (i.e. not for profit) companies.


 


Encourage co-operatives


If formal training isn’t available, self-employed workers could band together for mutual assistance.


Co-operatives are a way to bring the self-employed together under one roof, with each member having an equal stake and say in collective business, and pooling risk amongst them. Members exchange advice and ideas safe in the knowledge that what is good for one person is good for everyone.


The report proposes that the business community should explore the relative merits of different grassroots initiatives, and work with Co-operatives UK and existing trade bodies to spread word of schemes with the greatest potential. To best assist with this, the report suggests Government should also look at whether regulatory changes need to be made to remove barriers in the way of innovative schemes.


 


Jobcentre Plus could be valuable gateway to self-employment


Many Jobcentre Plus visitors may be being pushed into traditional employment when they could be training to run their own business.


The report suggests that the Department for Work and Pensions should ensure that at least one work coach in every branch is a trained self-employment specialist, and that business basics are introduced to work coaches as part of their training programme.


As the report pointedly notes “If welfare is the safety cushion for the self-employed, then business support is the springboard”. However, obtaining said support in the UK is easier said than done.

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