Is Your Business An 'Ugly Baby'?

If there is one table the UK economy consistently comes top of it is the business failure rates in Europe. But why does this happen?

If someone told you your baby was ugly, would you throw it away? And would you welcome the advice of anyone who told you to do so?

There is a link between these two ideas, and if you stick with me I’ll tell you what it is.

Businesses rarely fail from lack of sales. A more common failure is to judge the market potential inaccurately. Much as we all love the concept of conducting market research, we are not so in love with the conclusions. Market research will provide the figures and facts to support a business’s plan – but are these businesses prepared to believe the results?

Two people have what seems to be ‘a good idea’. In the way of the world, one of them ends up pregnant. For nine months she carries the concept around.

She (or both of you) chooses a name and a location. On a certain day with a lot of shouting and screaming the child is born. People ring up to congratulate the new arrival. It is extensively advertised in the local paper, and you both spend the rest of your life spending money to watch it grow.

Some nine months ago you thought of a business idea. You carry the concept around and choose a name and a location. On a certain day the business is launched with a lot of screaming and shouting. People ring up to congratulate you. It is extensively advertised in the local paper, and you both spend the rest of your life spending money to watch it grow.

I meet you pushing the pram. ‘May I look at your youngster? Thank you. Can I just say that my extensive research shows this child is without doubt the ugliest infant I have ever had the occasion to meet.’

Are you pleased at my comment? Do you thank me for telling you that your child is not worth the bother? Do you leave the infant on the roadside and sneak away? You have not gone through nine months of effort simply to pack it in on the opinion of a so-called expert.

Thus it is with a business. Even if research conclusively proves the infant business will not reach maturity – dare you pack it in and waste all your efforts? No way – it may be ugly, but it’s your baby!

The brave decision if you have any doubt after your market research is not to begin.

The poorest of businesses will normally last for three years. In the first year you notice nothing as you struggle to develop. The second year brings vague doubts. Finally in the third year the doubts become reality.

In the international Global Entrepreneurship Monitor (GEM) survey of entrepreneurial activity, the UK’s overall score of 5.4 is well below the average of 8.0 and far lower than the scores of countries such as the US (10.5) and New Zealand (14.0). We rank 23rd out of 37 countries.

However, surveys by the World Economic Forum and Anderson rank the UK as having one of the best regulatory regimes in the world for starting a business. This suggests that it may be other factors, notably our attitudes and culture, which are holding us back.

The GEM studies support this conclusion, showing that individuals in the UK are less inclined to self-employment than in other countries such as the US and Germany and less aware of entrepreneurial opportunities.

Less than half of our population believe they have the qualities to start up a business and more than a third say fear of failure would prevent them doing so.

Entrepreneur Secrets’ aspirations are high: we aim to have a major impact, bringing about a sea change in attitudes to enterprise.

Some people regard “culture” as an immovable constant or a mysterious undercurrent immune to intervention. Yet our national history is rich with examples of major changes in social attitudes that have been brought about through co-ordinated interventions, often in the form of coalition-based campaigns.

From the abolition of slavery through to votes for women, the provision of free education, protection of the environment, condemnation of drunk driving and innumerable other shifts in the public mood, there is hardly a change that has not been at least partly due to concerted attempts to influence people’s views.

But Entrepreneur Secrets needs to bring about change relatively quickly. The development of an enterprise culture is widely acknowledged to be hugely important for our economy, for the cohesion of our society and for helping to empower individuals.