How Ready is the African Caribbean Business Community to Create a Recession Proof 2011? For further information visit www.letstalkbusiness.biz by Sonia Brown, MBE Founder, the National Black Women’s Network and Let’s Talk Business
The government may be chanting all the right business affirmations of support, success and sustainability but the reality is very different for those entrepreneurs on the ground. With a lack of start up and growth funding; the demise of business support and high levels of bankruptcy, self employment is no longer providing the ‘get out’ card for financial security that made it a viable option for those with a good idea and enthusiasm to take action. Even those advisors charged with guiding us through traditional models of running our enterprises are finding themselves struggling to maintain their grant funded posts as quangos are being cut just as fast as they were set up prior to the arrival of the Coalition.
There is no doubt about it, the business environment is presenting many would be and established entrepreneurs with unprecedented challenges. They are struggling to maintain their competitive edge, let alone keeping their business relevant to their customers, in a time when global giants are eating away at their bottom line. Think the emergence of Tesco Express and your local corner shop!
Traditional businesses like catering, hairdressing, make up and tailoring still provide the backbone of many start ups within the ethnic minority community and should not be totally dismissed. However, there is a real worry when one walk’s down many High Streets to be confronted with back to back shops supplying its local residents with nothing but nail and weave salons; super hair outlets and vegetable stands. We know that the African Caribbean community have been setting up businesses in greater numbers than their other minority counterparts but in terms of real economic impact we still remain relatively invisible in the mainstream business economy.
How are our accountants, lawyers, computer specialists and financial traders taking business to the next level in 2011 and providing us with enough clout to have our voice heard in the new government? The Coalition have effectively wiped out complete sectors of consultants who have benefited and depended on a decade of supplying intellectual property to solution strapped government departments, local authorities and other public sector civil servants under the equalities banner. Our businesses are slower to create the numbers of consortiums needed to take a real slice of the procurement pie as many are too small or lack the experience to deliver the more lucrative contracts available at first and second tier levels.
With no end to the spiralling deficit and recession, the Coalition seem to be under the impression that consumers will continue to pay out for the recovery through higher taxes, VAT hikes and cost of living against a backdrop of higher redundancies, mortgage payments, utility bills and spending cuts. There has been little thought to the widespread concern of small business owners that the current policy is not stacking up in their favour. Long considered the backbone of the British economy, their biggest gripe is that having bailed out the banks; the banks are not bailing out the business community. If lending was difficult in the times of economic ‘boom’ what chance do they stand now in terms of getting their business off the ground let alone safeguard its ability to grow? The once safe micro finance system has now been hijacked by those unable to secure high street funding putting the more vulnerable at a greater disadvantage to set up their businesses. Statistics from the Micro Finance Institute claim 80% of applicants for micro finance come from the ethnic minority community. In the UK there are approx 69 micro finance institutes but they are facing unprecedented demands on their finance because mainstream banks have all but ceased lending. There is a growing trend emerging of people who would traditionally access mainstream finance are now going to micro finance lenders leaving vulnerable communities to compete against more experienced entrepreneurs who have assets.
The burden of red tape and corporate tax still continue to strangle innovation in enterprise as too many companies are living in fear of court action for failing to comply with copious numbers of regulations and policies introduced under the previous government. Not only is it bad for employers but as Britain becomes less unattractive for inward investment, we will be denied the benefits of foreign tax receipts and more importantly, job creation.
From every business support agency and government broadcast system, businesses are told to INNOVATE into new areas in order to become more competitive to survive. However, how many have the skills and acumen to come up with the innovative services and products needed to boost the economy, create jobs and minimise their dependency on the mainstream banking system to realise their entrepreneurial dreams. British inventors have historically had a difficult time to obtain investment for lengthy research and development costs; so one wonders how realistic it is to put all our hopes on this being the solution for taking us out of the deficit. The dynamic duo Sharon Warmington and Peter Morrison created Leaf Log, an environmentally friendly biomass solid fuel but found even though they had a successful business could not manufacture in the UK because of the exorbitant manufacturing costs involved and have had to move overseas to remain financially viable.
Without core funding and capacity building what does the future hold for many of our African Caribbean businesses in the UK? As many struggle to keep their businesses afloat, we are seeing a real struggle to maintain let alone increase our economic positioning and impact in national policy as our voice diminishes further and further around the negotiation table. Our business leaders have become fragmented and almost silent, just like the funding and various ethnic minority task forces! This lack of leadership and participation means the African Caribbean community will be excluded from the major decisions associated with local enterprise partnerships (LEPs) and the Big Society agenda which would benefit our communities if we understood and engaged. It’s not just core businesses that will suffer, but the independent social enterprises that have provided critical services in our community. Their inadequate and fragile infrastructure means they will find themselves swallowed up by the mainstream powerhouses who were never able to support the niche needs of an isolated community due to its cultural and gender issues.
Let’s hope that as the Coalition continue its drive to reduce the deficit, that our business leaders will come up with strategies and solutions needed to nurture our businesses to thrive and prosper in 2011. For further information visit www.letstalkbusiness.biz
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