More support needed for entrepreneurs

Britain has become too risk averse and Government and industry must work together to break down the barriers holding back growth, particularly for smaller businesses in their early stages, according to a leading business advisor.

Digby Jones, or Lord Jones of Birmingham, who is a former head of the Confederation of British Industry (CBI) and turnaround expert issued a warning last week that small firms need greater support if the economic recovery is to be sustained.

His message was that with any small business, especially one in its early stages, there are obstacles to overcome and calculated risks that must be taken in order to generate wealth.

However, he added that too often the emphasis is put on failing businesses without the appreciation that there always exists a risk versus reward aspect to growth and generating profits.

Speaking at the Institute for Turnaround (IfT), Lord Jones said that not all businesses will succeed, and when they do not, they need skill, courage and capital to give them the time necessary to review options, take advice from others and turn around their fortunes.

He added that there was a knock-on effect to the wider economy if small firms cannot grow and lack the proper support, saying that the livelihoods of many people and the very vibrancy of local communities can depend on the quality of business advice, the clarity of planning and the efficacy of execution.

The IfT, whose members specialise in turning around struggling businesses, has long campaigned for Government, regulators, banks and other organisations to do more to help small and medium-sized enterprises (SMEs).

A spokeswoman for the Institute said that access to finance remains limited for small and start-up firms, which in turn restricts growth and limits investment into businesses, their employees and the wider economy, so it is no surprise that many of them remain dormant or fail.