The spirit of 42
Our annual 42-under-42 feature is Insider’s attempt to identify the region’s young entrepreneurial talent. This week, alongside fellow judges Andy Hodges from Challinors, David Hardman from Birmingham Science Park Aston and Miles Plumb from Coutts, I have been trying to select the cream of this year’s crop.
Two things quickly became apparent from looking through the 42 application forms that outline the future plans of our young entrants and give their thoughts on the wider business world. The first is the realisation of just how much young entrepreneurial talent there is in this region and how ambition and determination outweighs fear of failure – made even more apparent by the number of 42ers who have set up businesses during the recession.
Interestingly – and probably indicative of our times – many of those businesses are in the service sector and what might loosely be described as creative industries. There are few new manufacturers coming forward. But having said that, the ventures started are a varied bunch – from setting up a new bus company to providing spinal and orthopaedic implants via developing bio-energy power stations and supplying organic beauty products.
The other thing that becomes apparent I’m less happy to report: a general complaint about the ability to attract funding. As one of our 42ers put it: “It would have been very beneficial to have had a grant or business funding, as this is the main inhibitor to starting a business and getting it on the right track. Financial constraints are the main cause of worry.”
It can’t be said enough that these companies are the lifeblood of our regional economy. They have shown incredible bravery to put their heads above the parapet and set up something which, if successful, will provide employment and contribute positively to West Midlands plc. It is not bank bashing but a statement of fact to say the banks, by contrast, seem largely unwilling to take a risk. Inasmuch as they are providing finance to companies at the moment, it is mainly to large, well-known companies, following the “nobody ever got fired for buying IBM” maxim.
A number of public sector-backed funds have been set up of late to help bridge this funding gap. They are doing a good job and are very welcome, but clearly the banks need to get back into the game.
A number of the companies set up by this year’s 42ers will fail. That’s the nature of these things. Hopefully they will dust themselves down and start again. Many of the world’s top entrepreneurs failed time and time again before hitting on the big idea that made their names.
But if the reason for failing is a lack of available finance in the market, we are creating a problem for the economy that will come back to haunt us down the line. It may put people off setting up businesses in the future, businesses that we desperately need to be set up.
We are two weeks into the general election campaign. Let’s hope that whoever wins on 6 May will make small business finance an absolute priority.
Andy Coyne, editor, Midlands Business Insider
