Slow and steady…

Starting a business is not necessarily about being the biggest, the fastest or the strongest. With the right advice, networks and resources, anyone can succeed, writes Robert Kelsey

The coalition government believes that private-sector employment can replace the jobs being lost in the public sector, with start-up businesses being hailed as crucial contributors in this respect. At a time of continued economic uncertainty, however, can we really expect people from all social groups to embrace enterprise? Indeed, couldn’t it be considered socially irresponsible to encourage economically vulnerable people to bet their meagre life savings on a venture?

Yet for those facing economic hardship, entrepreneurship is potentially a liberating career choice. Recent research into UK entrepreneurs by data analysts Experian shows that ethnic minorities (including the Irish) and those with learning difficulties such as dyslexia are over-represented. This suggests that entrepreneurship is a naturally effective equal-opportunities arena, perhaps even counterbalancing ingrained prejudice in more formal working environments.

“The wish to overcome prejudice is a key reason why many people start out on their own,” says RSA Fellowship Council member Emma Jones, head of small-business support initiative Enterprise Nation. “Running your own business is fantastically meritocratic. It is also flexible in ways that employment cannot be, hence the large number of young mums starting businesses.”

Exclusion concerns do, of course, exist among budding entrepreneurs, but they go beyond ethnic, gender, age and ability divides. This is creating a new kind of social gap: one between people with high fear of failure (whom I call ‘High-FFs’) and their opposites, those with high achievement motivation (‘High-AMs’).

Fear of failure is a condition from which millions suffer, irrespective of gender, class, ethnicity or age. High-FFs approach tasks expecting failure and dreading the potential for public humiliation that such failure brings. This leads them to employ avoidance techniques that, ultimately, confirm their negative predictions. While many would love to start a business – often because they feel overlooked or belittled in their current situation – they are afraid of the risks involved, making fear of failure both a debilitating and self-fulfilling affliction.   

TV programmes such as the BBC’s Dragons’ Den don’t help. This is behind-the-sofa viewing for most High-FF would-be entrepreneurs, whose resolve to start a business is likely to be eroded with every public roasting from a ‘dragon’. The steely traits that form the public image of the dragons are a long way from those of the typical High-FF.  

Like the dragons, successful entrepreneurs create their own mythology. For instance, in his book The Beermat Entrepreneur, start-up guru Mike Southon writes: “Entrepreneurs are confident. They are born optimists: they simply know they can do it. Entrepreneurs are also charismatic. They inspire people …they have optimism to spare. Entrepreneurs are also arrogant. They know they are good.”

Yet entrepreneurialism has nothing to do with hardwired personality traits. Like so many other celebrity entrepreneurs, Southon is describing himself, while conveying an image of entrepreneurship that is aggressive, short-sighted and unfair, not least because it alienates – and therefore excludes – so many potential entrepreneurs.  

A recent survey, presented at the UK launch of Global Entrepreneurship Week, revealed that about 50 percent of people in the UK are considering becoming their own boss, yet only 5 percent are doing something about it. So what’s stopping the other 45 percent? Partly fear of the risks and costs associated with starting a new business, and partly fear that they do not fit the stereotype of the ‘maverick’ entrepreneur.

Emma Jones points out that most budding entrepreneurs are simply looking for freedom and flexibility in their working life. The typical small-business owner, she says, is a “mum who starts a business to earn extra money for the household while still being able to do the school run”. She adds: “This is a long way from the defy-all-odds swashbuckling heroes who are most associated with entrepreneurship.”

One step at a time

So what can be done? Support mechanisms such as Enterprise Nation are a start, but what about funding? Fear of the financial consequences of failure is a key barrier, making the reintroduction of the Thatcher-era Enterprise Allowance Scheme for the unemployed a strong move.

Yet many people overestimate the financial requirements for a start-up enterprise. Jones says that the best way to start a business is modestly: through cautious planning and by sticking to a strict budget, perhaps while working from home or, at least at first, continuing with the day job.

This is a crucial message. In some ways, too much funding can actually disadvantage entrepreneurs in the early stages of their venture. Grants can create unnecessary and potentially fear-inducing liabilities, such as forcing a start-up to operate at a higher level than its income comfortably allows and so saddling it with unaffordable costs once the grant has been spent.  

An effective alternative is self-financing, in particular ‘bootstrapping’, which involves entrepreneurs – especially nervous ones – starting small and staying within their means. Fred DeLuca, founder of sandwich chain Subway, began with an investment of US$1,000 (£750) and bootstrapped his way to a fortune. He relied on cash flow to expand and never over-extended himself through debt or equity, both of which bring external obligations that can increase both the risk and the fear.

“Just because it is small doesn’t mean the business can’t grow,” writes DeLuca in his book, Start Small, Finish Big. “And, while it is small, you will have the time to learn the lessons that are essential to your future success.”

Such sentiments certainly undermine any notions of inequality when it comes to succeeding as an entrepreneur: quite the opposite. Indeed, fearful people of modest means are just as well suited to entrepreneurship as their bolder, more affluent counterparts. They may even be more so, given the need for start-ups to be grounded and sustainable, rather than overnight sensations.

Entrepreneurship can be isolating, however, which can compound fears, erode resolve and increase the failure rate. At Metrocube (an early noughties incubator for dotcom start-ups, where I was CEO), our aim was to get would-be entrepreneurs out of their bedrooms and into a community environment where they could swap ideas and favours with a network of like-minded individuals. Fostering camaraderie is also one of the goals at the heart of Enterprise Nation and other collegiate initiatives such as the Institute of Entrepreneurs, run by RSA chairman Luke Johnson.

Networks offer more than just advice and resources. While these are helpful, it is the shared concerns and sense of fellowship that are vital to the lonely entrepreneur, especially if his or her own socio-economic grouping is under-represented in entrepreneurial circles. Mentoring can also be valuable, although care is needed when trying to impose formal structures on individuals who may just be looking for shared experiences, occasional guidance and – most importantly – a network.

Networks, however, are only part of the answer. More importantly, the image of entrepreneurship needs to change so that it encourages both the cautious and the fearful, proving that this most meritocratic of economic sectors is open to all.


Robert Kelsey FRSA is a businessman and author. Robert Kelsey’s book, 'What’s Stopping You? Why Smart People Don’t Always Reach Their Potential', and 'How You Can' is published by Capstone/Wiley in April 2011.

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The RSA's Social Entrepreneurs Network provides a source of support and advice to Fellows interested in social enterprise. Join in the discussion and connect with other Fellows.


The media overplays the image of the nasty entrepreneur

Rajeeb Dey FRSA founded Enternships.com, a recruitment service that gives students and graduates experience of working in fast-growth or entrepreneurial firms, in 2005, having obtained funding through the RSA Coffeehouse Challenge, a precursor to the Catalyst fund. Today, more than 2,000 companies use the service to recruit ‘enterns’ in 20 countries.

With more graduates than ever facing unemployment, Dey is keen to encourage them to explore career opportunities outside the conventional graduate recruitment schemes.

“The best way for aspiring entrepreneurs to succeed is to learn from other entrepreneurs, yet most undergraduates only get exposure to the big corporates,” he points out. “We’re trying to help them break out from the usual structures and processes.”

The ‘enternships’ fall into a range of categories, including experience in start-up companies, business development projects in more established companies and opportunities to work for high-profile entrepreneurs.

Dey believes that the main obstacle facing would-be entrepreneurs is fear of failure. “There is a real stigma attached to failure in the UK, whereas it is often seen as a badge of honour in the US,” he claims. “Young people need to be comfortable with the fact that they don’t have all the answers.”

He sees a need for younger role models who are less removed from real life than celebrity entrepreneurs. “The media overplays the image of the nasty entrepreneur. It’s easy to forget that business is primarily relationship-driven.”

Find out more at Enternships.


Mentoring can break down barriers within organisations

With a background in the technology sector and experience of several mentoring schemes, Paul Massey FRSA was well placed to launch MentorWell.com, which aims to make mentoring easier for both individuals and organisations.

“Having been involved in mentoring, I know how hard it can be to manage mentoring schemes and for mentors to manage relationships with mentees,” explains Massey. “I wanted to create a set of easy online tools that would enable mentors and mentees to work better together, such as an online feedback system that replaces old-fashioned paper reports.”

With the help of a £500 RSA Catalyst grant, Massey has created a free, downloadable toolkit that offers advice about mentoring techniques. Approaches include peer mentoring, which enables young entrepreneurs to learn from their peers, and traditional mentoring, where younger mentees benefit from the experience of their older counterparts. “This can help to break down barriers within organisations,” says Massey.

MentorWell already supports several organisations that run mentoring schemes, including the Young Achiever Awards, Suffolk University and Chelsea Neighbour, the brainchild of Sarah Farrugia FRSA. Using MentorWell’s resources, Farrugia plans to pilot a scheme in Chelsea that supports young people who are about to enter the world of work.

Massey is using the RSA Skills bank to make contact with Fellows who run, or are interested in running, mentoring schemes, whatever sector they are in.

Find out more at Mentorwell.


This is an experiment in opening up community resilience

The Harrogate Community Enterprise Hub, an initiative that aims to support people who are interested in self-employment or new business models, has benefited from a £2,000 grant from RSA Catalyst.

Richard Williams FRSA is working with a number of other Fellows from the Harrogate network to develop the hub, which will be based in a local café. The scheme will connect people who are considering self-employment – such as mothers returning to work, new graduates and people who have been made redundant – with ‘enterprise mentors’ who can direct them to the appropriate sources of advice.

“A lot of resilience lies in the community and this is an experiment in opening that up,” explains Williams. The aim is to run a one-year feasibility project to determine the scale of local interest and build relationships with existing support services. More than 15 volunteers have put themselves forward to act as mentors, and an intern (whose expenses will be covered by the RSA Catalyst grant) will use the community café as a base for attracting and meeting with potential mentees.

“The economic recovery will depend in part on the growth of small but creative firms,” says Williams. “We want to give people the advice and support they need to make their business ideas viable.”

The Harrogate Community Enterprise Hub has found mentors through the local Fellows’ Network, the Skills bank and the local Fellowship Networks manager. To get involved, please email Richard Williams.