- Almost a third of people would consider starting a business if they lost their job in next 12 months
- Octopus is proposing a range of initiatives, headlined by a new £1 billion Springboard Fund which could help create 100,000 new businesses
Octopus Group, the financial services and energy firm, is calling for the government to help create a plan to enable a ‘nation of entrepreneurs’ to support the UK’s post-pandemic recovery by providing targeted support to those who want to start their own companies.
Octopus is launching a national conversation to develop a number of achievable and practical steps that it believes should be considered by government.
According to research recently commissioned by Octopus1, 32% of people said that they would consider starting their own business and becoming self-employed if they lost their job in the next 12 months. However, 56% said the need to prioritise finding a new job in order to pay the bills would present a significant barrier, with women (63%) more likely to say this than men (50%).
A range of initiatives are being worked up, including an ambitious target of a £1 billion ‘Springboard Fund’, which would provide a grant of up to £10,000 per individual to help create up to 100,000 businesses.
At a cost of £1 billion to the Treasury, the Springboard Fund would be designed to help entrepreneurs overcome the initial and most significant barrier of launching a business by relieving the day-to-day financial pressures associated with getting a business up and running. The support could be promoted throughout the UK particularly to women, those from disadvantaged backgrounds or with disabilities, and people from sectors or regions where significant numbers of jobs have been lost or are at risk.
Other initiatives under consideration include:
- Targeted support distributed at a local level – to support the ‘levelling up’ agenda, with the Springboard Fund to be distributed through local authorities, Local Enterprise Partnerships, and regional growth hubs.
- Mentor scheme – delivered by successful entrepreneurs and businesspeople from a range of backgrounds across the country. Mentors could provide crucial business advice and help inspire those who don’t think that ‘someone like me’ can be an entrepreneur. Octopus is calling for a national effort where business leaders can actively play a role in supporting the next generation of entrepreneurs.
- Digital learning programme – to give Springboard Fund recipients the skills they need to succeed and to ensure that even those whose businesses aren’t successful still learn new business skills that are valuable to a future employer.
- Incentives for businesses to promote entrepreneurship – such as tax breaks, for businesses which offer and promote internal schemes to help employees explore their business ideas
Chris Hulatt, co-founder of Octopus Group, said:
“Entrepreneurs and small business owners are the lifeblood of the economy and there is a huge opportunity to jump-start the economic recovery by using targeted initiatives to unleash a ‘nation of entrepreneurs’, as we rebuild local communities across the UK.
“As the furlough scheme and other more ‘protective’ measures draw to an end, it is inevitable that many people will sadly lose their jobs. This means our attention must now urgently switch to job creation. One way to do this is to make the UK the best place in the world to set up and grow your own business. This isn’t just about smart tech companies in London or a clever new invention, it’s about independent shops on the high street, a mobile food van, or someone that wants to turn their jewellery making passion into a full-time business.
“However, the decision to start out on your own isn’t easy at the best of times and, if someone has become unemployed, they may feel pressure to take the first job they can find in order to pay the bills. That’s where something like the Springboard Fund could make all the difference, giving people the financial breathing room that allows them to take that leap and get started.”
Octopus Group was founded in 2000 by Simon Rogerson and Chris Hulatt after the pair left Mercury Asset Management to set up their own fund management business, which now spans financial services and energy. As of today, has more than 1,400 permanent staff and £8.6bn under management2. Its venture capital arm, Octopus Ventures, has backed more than 100 early stage start-ups.
Octopus also runs its own internal Springboard scheme, providing employees with advice and guidance on how to start a business, after which they can pitch the idea to one of the co-founders. If successful, they are given financial support and investment to help get the business off the ground. To encourage employees to take the leap, Springboard participants are allowed to return to their previous role if the business doesn’t prove to be viable.
Parent Cloud is an example of a successful business to come from the scheme. Founded by Karen Taylor, formerly a HR manager at Octopus, it provides access to guidance for mums and dads pre-pregnancy, after birth, returning to work and beyond, with services to help improve confidence, mental health, and ultimately increase employee engagement, diversity, and productivity.
Chris Hulatt added:
“I feel incredibly fortunate to be a successful entrepreneur and starting a scheme like this at Octopus felt like a great way to help others to do the same. The experience and skills you gain from starting your own business are enormous and you learn more in those first few months than you would in years working in a ‘normal’ job. Clearly, the ambition is for these businesses to succeed, but if it doesn’t work out, you will be so much more valuable to any prospective employer having tried and failed than never having tried at all.”
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Notes to editors:
1) Polling carried out by Opinium between 17th and 19th July 2020 – with a sample of 2,004 UK Adults weighted to be nationally representative of the UK population.
2) Includes funds under advisory mandates and the Octopus Cash service.
For journalists in their professional capacity only. Issued by Octopus Group July 2020.