In harsh economic times small businesses face many challenges. Most will be experiencing trading difficulties for the first time in their history, and entrepreneurs brave enough to begin a business in this climate will need advice and support from all quarters if they are to survive.
The Government is not slow to recognise the importance of small businesses to the British economy. Businesses that employ under 50 staff account for more than 99% of the UK’s workforce and contribute over 53% of its GDP; that’s 12.83 million employees and a massive £1.23 billion – undeniably significant to the economic health of the UK. Measures designed to help small businesses survive the fallout from the credit crunch are very much on the Treasury’s agenda, but it seems more will need to be done!
Evidence is growing that businesses which start life in a business incubation centre have a far higher chance of survival and, ultimately, success. True Business Incubation Centres offer far more than serviced offices. There will usually be on site advice from accredited advisors, activities such as business or entrepreneur clubs, and useful opportunities to network – or inter-trade – with other young businesses.
So where do many businesses go wrong during those initial crucial months and how can business incubation centres help?
Poor decision making - The time leading up to and immediately after the business formation determines market position, customer base and trading culture; key elements that will linger for many years. New business owners can fall into the trap of starting off on a ‘high’, using existing contacts or gaining a contract that keeps heads above water for a fixed length of time, thus allowing events to carry them along whilst decisions are made by default. Whilst there is nothing wrong with using pre-existing work contacts, businesses that neglect the future will suffer. Looking ahead whilst living a ‘hand to mouth’ existence is difficult; professional advisors, especially those at incubation centres, will be close enough to see the detail but removed enough to take an objective view, using their experience of planning and strategy to the long term benefit of the business.
Falling at the first hurdle - Running a business can be lonely in the extreme. No longer are there colleagues to bounce ideas off, managers to give direction, structures within which to work or defined job responsibilities. The up side of course is that the entrepreneur gets to make the decisions, doesn’t get bogged down with office politics and reaps the rewards when things go well. But the down side can be fatal. Problems will occur that have not been encountered before; priorities will be tricky when every customer is important as the one before and perhaps most dangerous of all, the future of the business can take a back seat when time is fully occupied by ‘fire fighting’.
All of this can be overwhelming for the first time business owner. Advisors at Business Incubation Centres are on hand when problems strike, ready to act as mentors or simply provide a reality check. Advice at these times can be a literal life-line for the new business.
Over-committing the budget - Of all the businesses launched each year by far the majority have the financial resources of the proverbial church mouse. Managing money is critical in the first months of trading. Expensive premises and long term leases can bring the business to its knees. Business Incubation Centres offer flexible ‘easy in – easy out’ terms and competitive rates, often with on-site services included.
Lack of professionalism - Working from home can be perfect for some but spell disaster for others. If the business has visiting customers, they will expect a professional environment rather than a back bedroom turned into an office. Distractions caused by small children, spouses, even the garden(!) can prove too hard to resist. Just the clutter of the office and the inescapable workload can be a barrier to good business practice. Business Incubation Centres offer professional space with reception staff to greet visitors as well as facilities such as meeting rooms for hire. Image, as they say, can be everything!
Poor resources and facilities - Working for yourself means exactly that – from putting on the MD’s decision-making hat to sweeping up and brewing the tea. If the business start up is a sole trader (and many are) then expertise will be limited. Successful businesses are multi-skilled but only the very few are in possession of all of the necessary attributes. Taking a unit in a Business Incubation Centre will open doors to IT experts, financial advisers, solicitors, book-keeping services, heating engineers, car mechanics and plenty more. Knowing someone who knows someone can prove indispensable!
The UK economy shows no sign of shifting its emphasis from small businesses and service sector industries. In this light, business incubation centres will be a critical link in the chain of services required to nurture business start ups. As the country gets to grip with the recession and emerges from it, leaner and better equipped for the future, there will be a need for more incubation centres to support growing demand.
In Colchester, the Business Centre in George Williams Way (just off Magdalen Street) is a modern serviced building in the town centre that provides flexible space for start ups and on site car parking. There are 34 units available ranging from 200 to 400 square feet. For a tour of the centre and more information about the services on offer, contact Bob Baggalley on 01206 548833 or email.
