Charles Clarke MP backs franchising

SMEs (small and medium sized enterprises) face a range of issues at the moment although the main one is access to finance, which is due to the financial credit crunch,' says Charles Clarke. 'Banks are less likely to invest in a new SME start up because there is no guarantee that they will get a return on their investment.

'Other factors inhibiting prospective small business owners from launching include the uncertainty or fear of going alone and taking sole responsibility for their future, to knowing how to market products effectively and get the business up and running as profitably as soon as possible.

'However, the government has different initiatives and agencies in place to help small business owners overcome these problems, as well as understanding tax and employment. The government has invested £350 million into its Train to Gain Scheme, which helps small business owners and their staff develop and learn the correct skills and knowledge for their vocations.

'Small business owners have access to financial advice from the Institute of Credit Management and a health check by government-funded organisation Business Link. The health check assesses and identifies the key problem areas (if any) within the business model and an advisor suggests ways to overcome them and prevent similar problems from occurring in the future.

'In the East of England, Business Link has organised a Business Enterprise School where prospective business owners can sign up for a free business planning workshop. Here they will learn how to set up and run a business properly and will be told what pitfalls to look out for.'

Survival as a small business owner can be difficult, statistics show that only 66 per cent of small business start ups, who do not seek any professional help or guidance, will survive beyond the first three years of trading. Whereas, 81 per cent of small business owners who seek help from a Business Link advisor have a life span that exceeds three years.

'Franchising is a great, low risk way to get into business,' enthuses Charles. 'This is because when you invest in a franchise you buy the rights to a recognisable brand, tried and tested business model, proven track record and ongoing support and training package. This means all the mistakes that could be made have already been made, so as a franchisee you avoid the common pitfalls a new business owner may fall into. With the backing and experience of a franchisor coupled with a formula to success you are more likely to survive especially in a time of economic uncertainty.'

Interview by Jess Sturman