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Octopus calls for a nation of entrepreneurs to rebuild UK economy

6 Aug 2020

The coronavirus pandemic has hit the UK economy hard. Businesses have been struggling and many have had to let staff go. With lockdown lifting, the economy is entering the recovery phase, but there will likely be a large number of jobs lost in the months ahead as the furlough scheme comes to an end. In fact, almost a quarter of the UK’s working population is at risk of losing their jobs in the coming months.

Since the pandemic hit the government has, quite rightly, focused on saving as many jobs as possible. But the emphasis is now shifting to getting people back into work. And the best way to tackle this is to make sure the UK is the easiest and best place to start a company, encouraging the setup of new small businesses which can provide opportunities across the country.

Small businesses will drive our recovery

Small businesses make up 99% of all private companies in Britain. They employ almost 50% of the country’s workforce and contribute to the majority of our job growth, too. Creating more of these types of businesses can help us drive the recovery of our economy.

Over the last 20 years, I’ve seen the positive impact entrepreneurs can have on job creation. Starting as three founders, then developing into a small business and beyond, Octopus Group has grown to employ more than 1,000 people. We’ve backed hundreds of small companies over the years, and seen these companies create employment opportunities for thousands of people.  We’ve also been proud to see people leave Octopus to start their own companies.

The UK is full of people who would like to start their own business. Recent research conducted by Octopus showed that more than a third of people would consider becoming self-employed if they were to lose their job in the coming months. But we also found that for many of them, trying to start a business wouldn’t be a feasible option if they were to find themselves out of work.

More than 80% of our research participants said they wouldn’t have enough money to pay their rent or mortgage if they started a business instead of looking for a job. Instead, they would need to find another role, as quickly as possible, to make ends meet. For some, this could mean taking a job that doesn’t necessarily fit their skills or hopes for the future.

This problem needs to be fixed. Britain is full of ambitious, talented people who have too many barriers blocking them from trying to build their own company. But all they need is a bit of help to get started. If the government could create the right environment to give these people the support they need, it could mobilise a nation full of entrepreneurs to help fight the economic damage caused by coronavirus.

Introducing UK Springboard

Access to funds

To help a new wave of entrepreneurs begin building their businesses, we’re proposing a range of ideas. One suggestion is that the government launches a national Springboard scheme, based on the successful, internally run Octopus Springboard. The proposed £1billion scheme will provide £10,000 grants to individuals who’d like to become self-employed, helping create up to 100,000 new businesses. The purpose of the grants is to help cover living expenses for a few months, giving people financial breathing room while they set up their business.

Access to this sort of funding could help the man who lost his job in a bar to follow his dream of setting up his own hair salon, rather than being forced to take the next available position in bar work. Or it could help the woman, who had to drop to part-time hours at her local gym, to sell enough of the jewellery she makes at home to support herself and an assistant. It will give people the opportunity to provide for themselves while doing something they believe in, as well as potentially employing countless others in the future.

Diversifying entrepreneurship

London is a great place to start a business, especially if you’re a tech entrepreneur, given the wealth of funding and resources available there. Our vision is for Springboard to help potential business owners in all sectors, around the country, to access the same opportunities tech startups find in the capital. Anyone in the country can build any kind of business. The scheme will be open to everyone, encouraging people who perhaps think entrepreneurship “isn’t for me,” by breaking down barriers to entry. This, in turn, could aid social mobility around the country by reaching out to communities, such as women, ethnic minorities and people from disadvantaged backgrounds, that are currently under-represented in entrepreneurship.

Skills and inspiration

If I suggested to most people that they should start a business right now, chances are they’d say they wouldn’t know how to. This lack of knowledge is another big worry for aspiring entrepreneurs, and it’s one we’d like the Springboard programme to address. Through digital training, we should aim to equip participants with the basics of how to get a business up and running. Both this knowledge and the “on the job” experience of starting a company will also ensure that, should their business not succeed, the founder has learned a whole raft of new skills. These skills will, in turn, mean the participants are more employable in the future.

A mentoring programme, featuring entrepreneurs from a whole variety of backgrounds, should also form part of Springboard, with companies asked to provide their support to these new founders, offering practical advice and acting as an inspiration for the next generation of entrepreneurs.

A nation of entrepreneurs

The aftermath of coronavirus is the best time to build a new era of entrepreneurship, led by a group of new businesspeople who can help drive our country’s recovery. Our country is home to thousands of aspiring entrepreneurs who haven’t yet taken that initial step towards launching their businesses because they don’t know how to go about it or can’t afford to take the risk. The UK Springboard programme can remove the barriers that have stood in their way. It can provide them with the financial cushion they need to work on their companies, as well as the network and the skills to fill in any knowledge gaps.

If given the right opportunity, thousands of people could form new businesses in the wake of the current crisis. Each of these thousands of businesses then has the potential to employ countless others, multiplying the benefits of the Springboard scheme exponentially.

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