Is the Budget an opportunity for startups?
23/06/2010 send to a friend
As Harriet Harman responded to the presented Budget with the cry, "this budget will throw people out of work!", was I the only person to be thinking "Yes, but Harriet, lost jobs equals opportunity in the form of self-employment"? As I read through Budget reviews and responses, my one overriding feeling is there's never been a better time for employees to make moves to get out of employment and become their own boss.
Emergency Budget Day
Pay in the public sector (for anyone earning more than £21,000) has been frozen for two years. This means public sector employees will be looking to earn more cash in out-of-office hours. This is happening at the moment. One of the findings that surprised me in writing Working 5 to 9 is that of the 60 profiled 5 to 9'ers in the book, 48% are employed by the public sector. Teachers, nurses and civil servants across the land are turning their passions, hobbies and skills into a new way of making more of a living - this will increase dramatically in light of this Budget.
The 25% cuts across Government department budgets will impact private sector businesses who have relied on servicing government contracts. They will reduce headcount or possibly look for looser working arrangements where employees become self-employed freelancers, contracting services back to their previous employer, as well as working for others. This leads to an increase in the number of self-employed.
Seeing that starting your own business will become an increasingly attractive option for many. The Government has made life easier with a reduction in corporation tax, a commitment to reduce regulation, and to open up credit for small business. This is all positive, even if HM Treasury is not quite there when it comes to seeing that small and home based businesses are growing by outsourcing and sub-contracting as opposed to taking on staff, and there are many mentions in the Budget of making it easier for businesses to grow by employing (when that's not how many of us want to grow.)
The future
It is certainly a nerve-wracking time to think you may lose your job or have your pay frozen. But it is also a time of opportunity - the opportunity to take that idea for a business you've long held and do something about it.
For many this will involve starting by 'Working 5 to 9' which, in my view, is the very best way to start. Keep hold of the job, build your business on the side, and you will look back on this Budget as the one that made you take the decision that will inevitably lead to enjoying more income, more freedom and more control.
Seize the day, thank the Chancellor, and start making moves to ease out of employment and into self-employment. It's a move you won't regret.
Emma Jones
Emma is founder of Enterprise Nation, a business expert and author of Spare Room Start Up and Working 5 to 9.
Photo credit: HM Treasury
What do you think?
Do you agree with Emma that the budget, while painful, is an opportunity for startups and would-be entrepreneurs? Is that an optimistic way of looking at things? Do you think the coalition government has gone too far with the cuts? Or it it what the country needs?
Let us know in the comments below!
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Comments
Author: @AdrianEXG
Date: 23/06/2010
Comment: I agree.
It's almost digging up the traditional British way - we're at our best and most inventive in adversity.
I think this Budget has clearly defined the differences between the 2 sides of the House. Namely that Labour's policy seems to be to create a huge government employment scheme that we all have to pay for (public sector currently acounts for more than half of GDP), and the DemCon's is to create a business-based economy.
We all know it's going to be tough for the next few years, but just think of all those ex-public sector peeps that will need training in (e.g.) business skills to help them create their own businesses.
Remember, too, C K Pralahad - sell to the (80% at the) bottom of the pyramid! When times are tough, and people have less money in their pockets, it doesn't mean they aren't buying, just that they're buying a little bit further down the 'chain'.
There's opportunity out there....if we are prepared to grab it.
Website: www.experience-group.com
Author: Chris Maslin
Date: 23/06/2010
Comment: I agree completely. Country beginning to come out of recession, more business friendly government coming to power...a great time to start a business.
Letting go of that nice regular payday can be hard for many to cope with, and setting out on your own is never easy, but it's so much more satisfying.
Website: http://www.maslinsonline.co.uk/
Author: enterprisesoc
Date: 23/06/2010
Comment: Sadly your swooping generalisations may prove wrong. the majority of 'start-ups' in the uk are 'lifestyle' micro businesses - the majority of which fail in the first year. Of those that survive, most cater for those 'extra' consumer desires that go well beyond what one can be found in national chains orsupermarkets. niche services: organics, clothing, beauty, cake shops, car washes, creative workers, web designers, artists, muscians, decorators, gardeners, corner shops, restauranteers, etc etc.
These discretionary purchases are almost always more expensive than high street alternatives so will be first things consumers cut from spending, and also these sectors are already jam packed with self-employed business owners yet the average earning for 'lifestyle' entrepreneurs is well below national averages.
Necessity will push the unemployed into the self-employment corner - it's not your job to encourage them because you will lead the gullable and over optimistic into more failure and debt = more burdens on state and society. Reduced spending capacity in this struggling economy means that consumer demand will be significantly lower and therefore new business opportunities limited, infact, many lifestyle and 'home' businesses may close because of consumer fear and the likely double-dip recession before real growth resumes. This ignores the impact of the VAT rise in january which may push some solvent companies into the red.
if I were you, I would take that redundancy package and do another degree or two in programming chemistry biology physics engineering or maths. only through radical and incremental technological innovation can we collectively create new commercial businesses and products that will survive in the global economy.
Labours 'enterprise dream' has clearly ended in tears but a new dawn of hard working innovators will awake in their path. Promoting and institutionalising creativity is now the new priority for government - the era of committees for committees is most definitely over.
Website:
Author: Barbara Steadman
Date: 23/06/2010
Comment: I am so glad I have my 5 to 9 business. My future is at my fingertips and not someone elses. If something happens to my job I have my business to fall back on.
I am one of those facing no payrise for two (I have not had one for 2 years so thats 4 years of no pay increase). So my business is my pay rise.
Win win situation.
Barbara
Website: www.anothergorgeousday.co.uk
Author: Michael Green
Date: 24/06/2010
Comment: I completely agree with Chris Maslin who said:
"I agree completely. Country beginning to come out of recession, more business friendly government coming to power...a great time to start a business."
500,000 new businesses start a year and many from home. Over 7 million apparently work from home too!
5 million companies exist in the UK alone with under 15 employees and the budget will bring even more start ups and entrepreneurs.
The budget is pro business-Good Luck supporting business start up initiatives from home.
This coalition will put the Great back into Britain too!
Website: www.freeagentcentral.com