I am proud to be a member and sit on the board of The Entrepreneurial Exchange. It’s a unique organisation, as we say “by entrepreneurs and for entrepreneurs”, which means that it’s just entrepreneurs providing support, advice, inspiration, motivation and education to each other on how to grow their businesses. No matter what you do, you need to be around like minds to really be at the top of your game, and where else can you find some of the country’s best business people?
This week I attended the annual conference of our sister organisation in the North East of England, the Entrepreneurs’ Forum. They started out seven years ago using the Exchange’s model, and they have built a fantastic organisation which seems to be at the heart of the business community in this region.
You can view a 4 minute video clip of the best bits from the conference, but here are my highlights of the conference:
I have to own up here and say that my preconceptions of this Tory-donating Lord were not good. But how wrong could I be? Another reminder that we should be open-minded and reserve our judgement. I challenge anyone to not like Graham Kirkham; a classic example of a very nice guy with a rags-to-riches story. I am a real sucker for this type of entrepreneur, always polite, upbeat and motivational. You can see why his employees would want to make him proud. If they could bottle the energy of this guy the UK would be a much better place. DFS, a company he bought out of bankruptcy in the 1980s was originally private, then floated publicly, then taken private again and just last month sold to private equity. DFS has been his life work but it seems the timing now is right for slowing down, re-using a famous movie star quote, “good lighting can take years off you, but you can’t fool a flight of stairs”. In fact it’s not just that he is now 65 and wants to slow down but the timing seems right given that Capital Gains Tax is almost certainly going to be rising, “it’s not what you make that counts, but what you keep”.
He told us of his philosophy, “If you’re building something to last, patience is a virtue; don’t expect it to succeed overnight. Build it one brick at a time.” But he didn’t reveal the secrets to his success, “there are no magic beans, but we do have magic people that care”. He told us with conviction it’s all about people, people, people. “Look for potential and develop people,” and accept that you will get it wrong sometimes was his advice. This is a talented people-person who clearly has done pretty well at picking the right people and motivating them.
Dennis Turner, Chief Economist of HSBC
Usually at this stage of play when the headline sponsor comes on everyone starts checking their BlackBerrys and thinking of what to do when they get back to the office. Not so with this extraordinary, barnstorming performance from the chief number cruncher at one of the world’s biggest banks and the big bank which was least affected by the credit crunch. In his key note Dennis Turner zoomed through slide after slide of charts and statistics and at the end of it not only were we much better informed but we had been brilliantly entertained.
Firstly, a definition of recession: “It’s that time when even those who have no intention of paying you stop buying.”
Despite the jokes, “my wife’s credit card was stolen, but I didn’t report it stolen, as he was spending less than she was”, his message was fairly gloomy. There will be no investment led recovery, businesses are contracting and consumer spending is as well due to static or decreasing salaries coupled with rising energy and food prices. We will simply recover by the relatively painless depreciation of the currency, so the country can depreciate its way out of debt. Of course that devalued currency will help our manufacturing and exports immensely, but not be great for those of us going overseas for holidays.
Interestingly, Britain’s manufacturing sector has never been bigger in terms of revenues. It’s just that the nature of British manufacturing has changed, going up the value chain and that the service sector has expanded at a much faster rate, so the proportion of our GDP which comes from manufacturing has dropped significantly. There are some bright spots though; firstly, all sectors of the economy (services, manufacturing and construction) are all now expanding again, and destocking is at an end. As the economy contracted in real terms by 5% last year then any form of growth, however small, is welcomed. Without the significant intervention by Alistair Darling and massive public sector spending that contraction would have been far greater. Unfortunately when the credit crunch hit the British Government had already got massive debt, having significantly borrowed to fund the expansion of public services. Business as usual means 2.5% growth per annum and that’s what we need to get back to sooner rather than later.
The major problem is our level of debt, both personal and government. But the problem is not the amount of debt, but the cost of servicing that debt. While the Government needs to reduce its debt, will consumers reduce their level of borrowing over the long-term? Currently the average person owes 19 months of salary, “We know it’s important to live within our means, even if we have to borrow to do so.”
Jon Moulton, founder and managing partner, Better Capital
Jon shot to public fame when his previous investment partnership, Alchemy Partners, made a failed bid for the struggling Rover cars. Subsequently when Phoenix failed Moulton appeared frequently on TV to explain how it was never going to work. He is famous for being outspoken so I was looking forward to an exciting and passionate address by him. Wrong, for the third time! Due to urgent overseas travel Moulton had pre-recorded his talk. Following on from Dennis Turner, Moulton delivered a downbeat and cynical assessment of how screwed the economy is. It wasn’t what the assembled entrepreneurs were looking for. The video ended to a stony silence. Apart the general miserable tone I did get one interesting snippet and that was his view there are a significant number of zombie companies, being kept on life support artificially by the bank’s reluctance to crystallise their losses (and take more flak from Government for causing yet more business failures), and the government allowing businesses to defer payments to HMRC, on an interest free basis. He expects to see a lot more business failures before we can put the recession truly behind us. His sarcastic closing comments…. “don’t worry, everything will be fine, the country is being led by two ex-PR men.”