So how do you start a business in a recession?

Start a business that helps people start businesses, that's how.

Setting up a business during a recession is difficult. So why not start a business during a recession that helps people establish their own businesses? This was the original thinking behind Yoodoo, a medium-sized business based in London's Soho that has grown to provide high-engagement e-learning for all sorts of clients, from banks to dentists.

"Yoodoo began as an idea for a kind of web home for new entrepreneurs", says Nick Saalfeld, head of content at Yoodoo. But like many new businesses, Yoodoo has morphed over the years, and now does things that are far afield from the original yoodoo.biz – a website that guides users through every stage of the process of starting a business, and making it succeed, with videos from leading business professionals, downloadable documents, quizzes and practical walkthroughs.

What happened, Saalfeld tells me, is that Yoodoo discovered their forte lay in making e-learning work, getting it to produce real outcomes. Where the original may have taught mobile hairdressers, for instance, the basics of business, Yoodoo now powers the way dentists learn about compliance, helps recruitment consultants practice more successfully and gives unemployed people the skills to find work. It’s in providing outcome-focused learning experiences for other established companies that their primary activities now lie, and business is good.

Starting up during a recession, however, has serious risks. But asking Nick why is something of a non-question – he's been an entrepreneur "since before the word ‘entrepreneur’ was cool", and starting companies is just what he does.

On the specifics he is resolute. "In a recession, there’s a depleted pot of finance, which is of course fundamental", Nick says. "But people ramble on about the availability of finance… yes, it’s hard to get hold of, but it’s not impossible. It demands greater fiscal probity and ideally a demonstrably skilled management team.

"The bigger issue now, I think, is that macro-economic issues are affecting the optimism, outlook and visible horizon for small businesses. All of a sudden people were (and are) thinking: what about Spain, what about Ireland? These huge macro-economic issues can affect me and my little company. That’s the real issue with starting up in difficult times."

But Nick insists that difficult conditions have hidden opportunities. "Change means opportunity in business – it just does. Evolutions in markets, disparities of income, location, access to raw materials, technologies… all these disruptive breaks represent new opportunities. Don’t get me wrong, times are tough, but there is still room for ventures that can absolutely pay off. Don’t expect an easy ride – you’ll need to get used to living on fresh air – but fortune still favours the entrepreneur’s key skills: resilience, doggedness, and sheer hard graft."

What can government do to help small and medium sized-businesses to succeed? "The problem for the government", Nick says "is that it only has two tools - money and laws, and they’re both pretty blunt instruments.

"There’s a big hoo-ha about red tape. Frankly that’s immaterial, absolutely meaningless. For small businesses – and 95% of British businesses have fewer than 5 employees – none of that is a concern and for the massive majority, red tape isn’t the problem."

In Nick’s experience, the major problem for small businesses that government ought to concern itself with is education. "Modern education has brought us a generation that is ill-equipped to conduct business, and that makes me very, very sad indeed.

"Problem-solving, ambition, the ability to comprehend long term strategy and construct an argument - these skills are not being taught, and it is crippling SMEs who are still finding it easier to recruit abroad, for example."

If you look at the figures, he says, Britain has dropped several places down the world education rankings, and it shows. "If the government really wants to help small and medium sized businesses," Nick says, "the best thing they can do in the long term is put their effort into education."

What currently hinders entrepreneurs? From Yoodoo’s experience, the problems entrepreneurs face are universal – finding the right idea and sticking with it. "There are entrepreneurs who are eternally glass half-full. That’s fine. But the real trick to being an entrepreneur is doggedness. Not doggedness to the point of stupidity, not re-mortgaging your house for something that’s never going to happen, but a determination to find new solutions to problems. Keeping that up is the main engine of entrepreneurship, and always will be. It’s a great British tradition – from Brunel to Dyson – to ask, 'Well, that’s not very good, so why can’t we do things differently?’"

Despite the economic uncertainties, Nick is full of encouragement for self starters. "I would never say to someone: don’t start your own business," he says. "Look, if I lose a client I might lose 10% or 20% of my income. If I’m employed and I lose my client, I lose 100% of my income. It’s madness to say that running your own business is so much riskier."

That seems to be Yoodoo’s message: if you’re self-employed it’s all up to you. But at least it’s not up to someone else.

This article originally appeared in Economia.

Photograph: Getty Images
Getty
Show Hide image

The NS leader: Cold Britannia

Twenty years after the election of New Labour, for the left, it seems, things can only get worse. 

Twenty years after the election of New Labour, for the left, it seems, things can only get worse. The polls suggest a series of grim election defeats across Britain: Labour is 10 points behind the Conservatives even in Wales, putting Theresa May’s party on course to win a majority of seats there for the first time in a century. Meanwhile, in Scotland, the psephologist John Curtice expects the resurgent Tories, under the “centrist” leadership of Ruth Davidson, to gain seats while Labour struggles to cling on to its single MP.

Where did it all go wrong? In this week’s cover essay, beginning on page 26, John Harris traces the roots of Labour’s present troubles back to the scene of one of its greatest triumphs, on 1 May 1997, when it returned 418 MPs to the Commons and ended 18 years of Conservative rule. “Most pop-culture waves turn out to have been the advance party for a new mutation of capitalism, and so it proved with this one,” Mr Harris, one of the contributors to our New Times series, writes. “If Cool Britannia boiled down to anything, it was the birth of a London that by the early Noughties was becoming stupidly expensive and far too full of itself.”

Jump forward two decades and London is indeed now far too dominant in the British economy, sucking in a disproportionate number of graduates and immigrants and then expecting them to pay £4 for a milky coffee and £636,777 for an average house. Tackling the resentment caused by London’s dominance must be an urgent project for the Labour Party. It is one that Mr Corbyn and his key allies, John McDonnell, Emily Thornberry and Diane Abbott, are not well placed to do (all four are ultra-liberals who represent
London constituencies).

Labour must also find a happy relationship with patriotism, which lies beneath many of the other gripes made against Mr Corbyn: his discomfort with the institutions of the British state, his peacenik tendencies, his dislike of Nato and military alliances, his natural inclination towards transnational or foreign liberation movements, rather than seeking to evolve a popular national politics.

New Labour certainly knew how to wave the flag, even if the results made many on the left uncomfortable: on page 33, we republish our Leader from 2 May 1997, which complained about the “bulldog imagery” of Labour’s election campaign. Yet those heady weeks that followed Labour’s landslide victory were a time of optimism and renewal, when it was possible for people on the left to feel proud of their country and to celebrate its achievements, rather than just apologise for its mistakes. Today, Labour has become too reliant on misty invocations of the NHS to demonstrate that it likes or even understands the country it seeks to govern. A new patriotism, distinct from nationalism, is vital to any Labour revival.

That Tony Blair and his government have many detractors hardly needs to be said. The mistakes were grave: the catastrophic invasion of Iraq, a lax attitude to regulating the financial sector, a too-eager embrace of free-market globalisation, and the failure to impose transitional controls on immigration when eastern European states joined the EU. All contributed to the anger and disillusionment that led to the election as Labour leader of first the hapless Ed Miliband and then Jeremy Corbyn, a long-time rebel backbencher.

However, 20 years after the victory of the New Labour government, we should also acknowledge its successes, not least the minimum wage, education reform, Sure Start, a huge fall in pensioner poverty and investment in public services. Things did get better. They can do so again.

The far right halted

For once, the polls were correct. On 23 April, the centrist Emmanuel Macron triumphed in the first round of the French election with 24 per cent of the vote. The Front National’s Marine Le Pen came second with 21.3 per cent in an election in which the two main parties were routed. The two candidates will now face off on 7 May, and with the mainstream candidates of both left and right falling in behind Mr Macron, he will surely be France’s next president.

“There’s a clear distinction to be made between a political adversary and an enemy of the republic,” said Benoît Hamon, the candidate of the governing Parti Socialiste, who had strongly criticised Mr Macron during the campaign. “This is deadly serious now.” He is correct. Mr Macron may be a centrist rather than of the left but he is a democratic politician. Ms Le Pen is a borderline fascist and a victory for her would herald a dark future not just for France but for all of Europe. It is to Donald Trump’s deep shame that he appeared to endorse her on the eve of the vote.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

0800 7318496