Tuesday, October 17, 2006

 
Red tape and pinstripes strangling UK start-ups

Tuesday (D-Day minus three - hopefully)
Development spend: same (still haven't paid those invoices)
Number of stories written: 30
Number of rejections from banks: one

There was a story in yesterday's Guardian (http://business.guardian.co.uk/story/0,,1923181,00.html) asking whether the UK could produce a success like YouTube?

It broadly suggested that UK internet entrepreneurs were struggling in isolation, on shoestring budgets with limited access to the sort of people, technology and business support systems available to our US cousins.

I would agree with that. But I would also say the problem is at a much more basic level. It's not that you won't find venture capital and other funds (if you want them) once you've got a presence on the web, it's the day-to-day red tape that stops you even getting started in the UK.

Take me (this being my blog) as an example. It's now ten weeks since I gave up the day job in newspapers to concentrate on sweeble. Not only is the site still not live (although I'm currently pinning my hopes on getting it live this Friday), but every contact I've had with business advisers, bankers and agencies who are paid to help people like me get started in business has been torturous.

I spent three weeks pulling together the phenomenal wedge of forms the Alliance & Leicester needed in order to set up a business bank account, only to be turned down. The only reason being that Experian, the credit checking company A&L use, had seen that my company had previously been dormant and turned me down because that meant I didn't have a current trading record. Duh!

They suggested I start trading and get some cash going through my business account and reapply! I think the A&L are fine poaching existing business customers from other banks but don't have a clue how to work with start-up businesses. I'm seeing Lloyds this afternoon, they want me to take along my business plan and a stack of ID. All I want is to open a bank account so I can start invoicing - why is it such a biggy?

Having banks that can work outside a box-ticking process would be a start for helping entrepreneurs get legitimate businesses going in the UK.

And then there's that whole army of public sector staff paid to dole out business advice and piddling pockets of cash while drawing down double that in salaries and office costs.

Business Link - one day I will spit on your grave!

Advantage West Midlands have a pocket of seed funding especially for encouraging innovation and shiny new stuff. Trouble is they take so long making a decision that new ideas risk becoming old or lost before they manage to redirect any of our taxes. Again, a tonne of work for me putting the bid for £10k together, bringing in other companies, doing the research - and they are now over two weeks late on a decision that should, by their own target, have been made in three weeks max.

This is an innovation fund, six weeks delay in getting an innovation project underway can mean the difference between an idea succeeding or not.

Red tape and lack of commitment to what your clients actually need from you underpins seed support in the UK.


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On the plus side, I've now bought my own server (when I pay the invoice) and I've moved sweeble's office base out of the living room and into the new garden shed.
Bit chilly and I need to boost the wi-fi signal on foggy days but, hey, this is the reality of UK internet entrepreneurs.
Take note banks and development agencies.

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