Professionalization of the business start-up process

The UK has no shortage of business start-ups: the Small Business Service estimated that at the start of 2003 there were 4.0 million active enterprises and of these, approximately 99% were classified as small (0–49 employees). The Bank of England (2004) estimate that during 2003 there were 465 000 start-ups, an increase of 19% on 2002. Average survival rates for businesses (1992–2001) indicate that more than half fail within three years of formation. Further, there is a general agreement that for micro businesses the failure rate is higher, one-third failing within the first year.

Much of this failure has been blamed on a lack of business and management skills amongst owner managers. These people often describe themselves by their technical discipline rather than as a business person or manager, and tend to have an unwillingness to engage with training providers. It is suggested that this unwillingness is symptomatic of a culture of self-deception, which pervades the sector. This is despite 77% of owner managers believing their own business management capabilities to be the most important factor for business survival and growth.

Where business and management training has been taken up, its impact has proven sub-optimal, with little evidence of benefit perceived by owner managers. To this extent providers could be viewed as complicit in the maintenance of a culture of fire fighting within micro firms.

This paper discusses an alternative training programme — Sustainability Support for Small Business (S3). This provides help to new businesses over a four-month pre-start-up period and the first three years of operations. The programme addresses participants' short-term, immediate business needs by focusing on key business documents and facilitating reflection on the part of the owner manager, developing a more professional approach to start-up. This programme was trialled throughout 2003 using a cohort of 147 micro businesses. Subsequent evaluation revealed a one-year business survival rate of 86%. The programme received a 95% approval rating from participants in their post-programme evaluation.