It perhaps will surprise some of my more belligerent critics, but I am an entrepreneur. In 2008 I left a well-paid job as a lawyer in the City of London to set up my own business, This Fair Earth, tapping into the increasing demand for high quality, ethically-made goods. I used my own money to fund the start-up costs. I put together an extraordinarily detailed business plan which I think took the bank back somewhat when it was presented to them. I worked long hours to get the business off the ground and I am extraordinarily proud of what I have achieved.
However, the business is struggling now. It’s unquestionably a better run, more efficient and better targetted business than it was 2 1/2 years ago, but demand is falling. This despite the fact that November and December have historically been the strongest months, by a long way. I am hopeful there will be a rally this month and next, but I am markedly less confident than I was last year, in the teeth of the recession.
This is why I am skeptical, bordering on contemptuous, of the government’s ambitions for an increase in private sector employment. All the tax incentives in the world won’t help new businesses when consumer demand (from individuals or businesses) is rock bottom. We are allegedly in recovery, but there is very little optimism. Small business provides the employment for the majority of workers in this country, and yet the only jobs created in the past three quarters have been part-time. The number of full-time jobs has fallen during the “recovery”.
So, if you have a great idea and can afford to lose the money, by all means set up a business when you are kicked out of your job next year. You might succeed. However, even in the best of times, most start-ups fail within a year. With the government sucking money out of the regions and an unprecedented cut in the amount of spending coming from the centre, this percentage is likely to rise. This coalition has fanciful notions of an energised private sector leaping into the fray as the public sector is ravaged. It isn’t going to happen.
I have said it throughout the recession – the economy needs government support when demand is weak. It is exceptionally weak now. VAT rises and job losses in 2011 will make things worse. No-one has successfully cut their way out of recession and Ireland is once again showing us what not to do. This government steams ahead regardless.
So I offer two pieces of advice: First, don’t bet your mortgage on a start-up. If you have the money, the idea and the determination to establish a business, by all means try it, but don’t leave yourself exposed. And second, when you are working 20 hour days to make your vision become a reality, and you feel the confidence and demand seeping out of your market, make your voice heard. Fight back against the myths of entrepreneurship peddled by our new rulers, who can barely boast a day’s work in the private sector between them. Demand their support, because although they will never listen to the poor, unemployed and homeless, they might listen to you.