Small Talk: Brilliant but flighty... is that what we really think of entrepreneurs?

A relatively small number of small businesses really do have the power to transform the economy

A new word is needed to describe the class of worker that we are told is our best hope for dragging the nation out of its double dip. It sometimes feels these days as if entrepreneurs have the whole country's economic fate in their hands, such is the insistence from policymakers that only this elite cadre can put us back on the path to growth. Yet the sort of people that, for example, David Cameron – who has talked of how "entrepreneurs are the life blood of the economy" – has in mind do not appear to recognise the description.

There's nothing wrong with the Prime Minister's sentiment – just that it may have been badly expressed. For what most people, including many of Mr Cameron's entrepreneurs themselves, think of when they hear the word is some distance from the reality of the small businesses that really are Britain's best hope for escaping the recession.

Research from Sage, the accounting software provider, underlines this mismatch. Just one in four small business owners associate the word entrepreneur with people who have set up on their own. Rather, Sage's research suggests, they think entrepreneurs are people who may have brilliant ideas, but not necessarily the drive or financial acumen to excel at the day-to-day job of running a business.

Another perception is that entrepreneurs don't get their hands dirty. Rather, according to Sage's study, they're people such as Sir Richard Branson, left, who flit from one project to the next, delegating management responsibility to others. Alternatively, John Cridland, director general of the CBI, hit on another widely held view of entrepreneurs a few months ago, criticising their propensity to sell their businesses when the first decent offer comes along, rather than seeking to build them into national champions. He has a point – Britain certainly doesn't have the depth of mid-sized businesses seen in Germany, for instance – but the attack plays to this idea that entrepreneurs are flighty and short-termist.

Why do these perceptions matter? Well, if we really think that small, fast-growing businesses are the key to recovery, we shouldn't be describing them with a word that potential and existing business founders alike think describes a different type of individual altogether. To do so is to fail to offer encouragement to those we want to support. Moreover, the word has become pervasive. So we have "entrepreneurs' relief", a tax break for those selling start-up businesses, and loans for "young entrepreneurs" to start their own businesses – even an "energy entrepreneurs fund" for SMEs in the green energy field.

A relatively small number of small businesses really do have the power to transform Britain's economy. Analysis from Santander Bank suggests that just 5 per cent of SMEs are responsible for two-thirds of private sector employment – and that these businesses created 170,000 jobs in 2009 and 2010 at a time when the economy was stagnant.

If we want to encourage smart, driven people to start more of these vital growth businesses, we should think of a word other than entrepreneur to describe them – or at least start trying to address misconceptions about what entrepreneurialism really means.

Word is out about voice specialist Eckoh

Look out for results tomorrow from Eckoh, the Alternative Investment Market-listed specialist in voice recognition software, which is popular with call centres and other organisations that take large volumes of calls from the public.

Eckoh's numbers for the year to the end of March will be in line with analysts' expectations – a profit of £1.2m on sales of £10.3m. That's around 15 per cent up on 2011 and is the company's fourth successive year of double-digit growth. There have been a string of contract wins, including the company's first deal with a local authority, Essex County Council.

Eckoh shares are at 10.63p, up from 6.75p last September. But that's still a price to earnings ratio of just eight times forecasts for 2013 and analysts think there may be more upside to come.

Fresh look at American equities

Given that the US is one of the few Western economies that can say it is putting recession behind it, you might expect investors to be taking a close interest in its equities. But while there are buckets of unit trusts offering British investors exposure to US equities, there's a remarkable shortage of stock market-listed closed-end funds specialising in this area. Enter F&C Asset Management, the oldest name in investment trusts, which is now on the road raising money for a new venture in this sector. Sensibly, it intends to contract out day-to-day management of its new fund to a specialist US firm, Barrow, Hanley, Mewhinney & Strauss. The venture is planned to open for business later this month with £100m of assets under management.

Small Businesswoman of the Week

Claire Cairns, chief executive, Bottle PR: PR firms don't need to be based in London to win blue-chip clients

I started in public relations at the age of 18 and by the time I was 27 I realised I could work for myself – there were things about the industry that really frustrated me.

"By setting up outside London, we've been able to tackle one of my bugbears, that after PR agencies have won a pitch, the executives disappear and it's the junior staff who do all the work – we have a flat structure and even executives spend 50 per cent of their time on accounts.

"The other thing we feel incredibly strongly about is accountability – we've just spent nine months building our own proprietary evaluation tool, which will enable us to track the extent of all the key influences we ought to be driving on behalf of clients.

"It didn't happen overnight: I've been running Bottle for nine years now, but for the first two years I was basically a freelancer working on my own. Today we have 30 staff and an annual turnover of £2m. And we've proved that you don't have to be based in London to win blue-chip clients.

Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

The 50 Best beachwear

The 50 Best beachwear

The hottest summer gear for men and women
Still standing: George Galloway reveals why his staunchly Leftist outlook is still invariably right

Still standing: George Galloway

Written off, ridiculed, wrongly accused of taking bribes the honourable member for Bradford West, has never bowed to the critics.
How will Daniel Radcliffe's fans react to his latest turn - as a damaged, drug-taking Beatnik poet?

Daniel Radcliffe as drug-taking Beatnik poet

His decade as the boy wizard may be over, but that hasn't hexed Daniel Radcliffe's enchanted life.
For whom the bell tolls: £20m 'Memo' project takes shape on Dorset's Jurassic coast

'Memo' project takes shape on Dorset coast

It started as a stonemason's visionary idea – to commemorate all the species that have ever existed and are now extinct.
Just add sunshine: Bill Granger's Turkish delights

Just add sunshine: Bill Granger's Turkish delights

Turkish cuisine is perfect for those long, sociable weekend meals with friends. It's just a shame that money can't buy the key ingredient.
Objets czar: David Usborne’s collection of myriad objects is quite the mystery

Objets czar: David Usborne’s collection of myriad objects

To others, they're junk. To David Usborne, they are his life: useful gizmos, mysterious thingamajigs and anonymous articles that dominate his home.
The iron ore lady: Why the world's richest woman is mired in controversy

World's richest woman: Gina Rinehart

Family feuds, attempts to control the Australian media and bitter public disputes are keeping the mining magnate in the headlines.
We just click: How Lego keeps building on its success

How Lego keeps building on its success

This year, Lego announced record profits. Gerard Gilbert visits its Denmark HQ.
The other bits: Mark Hix creates delicious and economical meals with cheaper cuts of meat

Mark Hix cooks with cheaper cuts of meat

Our chef creates delicious and economical meals on a budget
Strokes of genius: How to create summer's bold make-up look

Strokes of genius: Summer's bold make-up

From coral lips to fly-away fringes, make-up artist Kim Brown and hair stylist Richard Scorer reveal how to create the look
Marking his territory: Kilian Hennessy creates fragrances designed to provoke the senses

Marking his territory: Kilian Hennessy

The perfumer creates fragrances designed to provoke the senses
Photo essay: Britain's 1948 Olympians today

Britain's 1948 Olympians today

Photo essay
The top five E3 2012 triumphs: From Ubisoft's suite of titles to Dishonored and The Last of Us

The top five E3 2012 triumphs

The games and moments that left us grinning like the Cheshire Cat
The green movement at 50: Can the world be saved?

Can the world be saved?

Population growth and climate change are the big problems facing the earth in the next 50 years. But are there any solutions?
France: Will xenophobia go mainstream?

France: Will xenophobia go mainstream?

In the beautiful Rhone delta, John Lichfield visits a village where a dangerous new political landscape is taking shape