Fortune favours the bold

Working in slippers - just one advantage of running your own business

WRITING a column about business is a bit like taking a plate out of a microwave oven. It seems hot to you, but never to anyone else.

But if you don’t own a business and are reading this page, the chances are you’ll want to have your own company in the future.

It might seem like a bad time to start a business now, what with it being July. This is one of the particularly dangerous months to begin a new venture. Other dangerous months are  January, February, March, April, May, June, August, September, October, November and December.

Take a minute and think about how many people you know who are thinking about starting – or have started – a business recently. Chances are, even in the midst of a recession, you’ve ticked off at least a couple of names, and that speaks volumes about how our economy is evolving.

Long-term structural and cultural changes are also pushing more people to pursue independence. Structurally, the gradual ebb of corporate loyalty as companies have reorganised and outsourced work has both pushed employees out the door and created a market for such workers to start their own specialised companies.

And culturally, our nearly constant economic growth since the Second World War has given people the luxury of looking for work that does more than just put food on the table.

Every year, for example, thousands of people strike out on their own as consultants or lobbyists, seeking the freedom and independence such an arrangement provides. While working for yourself can be financially precarious, it can also be more lucrative than working for someone else, and the trade-off is alluring: risky, yes, but now and then you can work all day in your slippers.

Other people, eager to run their own business but wary of the responsibility, have been turning to franchising in droves. For many people, this setup is a good middle ground – and training ground – for entrepreneurship, because the franchiser provides a framework and various kinds of help. Just as many people are becoming franchisees, as many small businesses are seeking to grow by franchising their concept.

The fact is that starting a business just requires that leap of faith – there’s never any time that is better than now. And there’s no point scouring pages for economic opinion to give yourself reasons to put it off. As one FSB member said to me, “I want a one-armed economist so that the guy could never make a statement and then say ‘on the other hand’.”

The fact is that the country needs entrepreneurs, although there is no point kidding ourselves that starting a business is easy. As we all know, small businesses are the major driving force in the economy. They employ well over half the workforce of the UK, and among them are the major corporations of the future, because every large company was once a small business.

With the right environment, one that gives them the flexibility to grow and prosper, they can continue to become an engine of growth. But although they may appear to be flourishing, there is an increasingly difficult and constraining business environment to contend with. Many of them are living with very small margins and tight cash flow. Costs are increasing but have to be absorbed.

At the same time, the pace of change is ever increasing and businesses have to respond to it. Global markets and global competitors mean that firms need to move even faster. Long term planning is becoming more and more difficult.

Yes, it is hard to be an owner-manager: running the business, finding the markets, coping with regulations, finding the staff, looking for finance, dealing with problems. The sector now requires greater management expertise than ever before. Directors and managers need a high level of skills, both professional and vocational, if firms are to flourish.

But keeping up with technology and regulation takes an increasing amount of this precious management time.

Despite this, it can be a thrilling and exhilarating thing to do, especially if you get it right. Over the lifetime of this column I’ll be exploring some small business issues, suggesting how things can be put right, and offering up some general advice.

For those of you who are still wondering whether to take the plunge – go on, you might as well. You don’t want to keep on reading this column and making money for other people. As Karl Marx’s wife once said, “I wish that dear Karl could have spent some time acquiring capital instead of merely writing about it.”