I was very happy to hear David Cameron mention the new Challenger Business Initiative in his speech at the lord majors banquet last week. There has been so much in the press about the recovery being fuelled by small businesses and innovation yet the very same businesses and innovators are calling for the support and there is none, or its very limited.
This new initiative aims to “enable new entrants and disruptive business models” to grow quickly over the next five years. In theory this should remove barriers to entry for innovative and dynamic startups. I work with people like this on a daily basis and understand the issues all too much so I eagerly logged on to read the report – from the department for business innovation and skills entitled ‘REMOVING RED TAPE FOR CHALLENGER BUSINESSES’ (dated Sept 2012 – so it’s not actually very new at all).
The report was constructed after collecting feedback from industry, entrepreneurs and business groups as part of the Red Tape challenge… you may have taken part? It outlines out a number of issues which had been identified as problem areas for innovative business, so I picked out the ones which I come across on a regular basis to see what help was coming.
I read up on the following issues in the report
Peer to Peer Lending & Equity Platforms
Finance for Knowledge-Based Businesses
Intellectual Property – Patents
Intellectual Property – Trade Marks
They do say they will implement and make changes over the next 5 years, so I was not expecting an all singing all dancing solution from 1st January….. but I was disappointed with what has been proposed so far:
Peer to Peer Lending & Equity Platforms: This new online way of achieving funding has seen massive growth in the past few years and although some aspects of equity platforms are subject to the Financial Services and Markets Act (FSMA) (2000) most sites and transactions are generally unregulated. There was some argument for introducing regulation but as this was an exercise to help reduce regulatory burdens and the market is still in its infancy, it was decided that it was best not to introduce regulation but rather the ‘Government proposes to: monitor the sector and encourage the industry to self-regulate’. I think they tried that with the press didn’t they? Anyway, to the man on the street, there is no action here, no change that helps with current struggles. So I moved on to the next common issue I come across.
Finance for Knowledge-Based Businesses: Lots of innovative business are based on knowledge rather than physical assets and may be based on something new and untested which is considered high risk and therefore harder to obtain funding for. ‘The Government proposes to: Work with banking and accountancy experts to improve existing guidance and Consider whether there are ways knowledge-based businesses access finance in other countries that UK businesses could learn from.’ In the mean time use the usual government site for So this could lead to something being tested and perhaps implemented in future years but it’s not going to help you if you are looking for funding now.
Intellectual property – Patents and trade marks: Obtaining some protection over your idea or product is essential for innovators, otherwise no sooner had you created something, someone with more available cash would just remake it better and faster. The current process is costly (from the perspective of a small business), can take ages and can be complex or confusing. The Government proposes to: Explore the operation of the U.S regime for small entities. Raise awareness of existing option available. Explore ways to reduce cost and complexity of the process whereby you can object to a new trademark registration
Don’t get me wrong I think the initiative is good, having Government focus on real business issues will hopefully lead to some positive change in the coming years.
However at present there is a lot of exploring, consideration and monitoring going on, one can only hope at some point they will get round to actually making the changes that count.
