In praise of second chances
Why we need to give entrepreneurs looking to build a business in the current economic climate a second chance to prove themselves
On the first floor of a modest Manchester-area office building, a landlord opens an office to its new occupant. The premises had been unoccupied since Spring 2008 when an overseas property seller went bust, abandoning its head office, furnishings and all. The new occupant was a familiar face: it was the former owner of the failed overseas property seller. The episode highlights two symptoms of economic recession: landlords prepared to lower both their rents and their standards, and entrepreneurs enjoying a rare second chance.
The word 'entrepreneur' comes from the French verb 'entreprendre', which means 'to undertake'. Indeed, an entrepreneur is an individual who undertakes a business venture at their risk. When they succeed, jobs are created, taxes are collected and value is added to the UK economy. When they fail, fortunes are lost, names are tarnished and doors close. Bankruptcy is likely turn a hapless entrepreneur into an economic untouchable.
This is a shame really, because not everyone gets it right the first time. Sometimes people are victims of circumstances over which they have no control.
The overseas property seller was a profitable business that worked to satisfy our taste for Spanish, French and Bulgarian holiday homes which, if you remember, was nearly insatiable. The pound was worth 1.5 Euros, credit and air travel were cheap, new markets were opening and we were cashing in on the rising value of our homes. Some questioned the sustainability of the situation, but no one anticipated that everything would go wrong at once. The company-owned high street sales boutique went first, followed by the central office.
Should the owner be punished? He operated legally, paid his taxes and provided employment for many people. His mistake was to find himself very much out of luck, very quickly. In fact, the end came so quickly that there was no time to adapt and nowhere to hide. Credit conditions had already worsened and with no recourse to emergency funding, the business collapsed.
The gentleman holding the keys to his old office has a lot of work to do to rebuild both his savings and reputation. What powerful incentives to build a healthier, more sustainable business. What courage to try again! He needs a second chance and we owe it to ourselves to give it to him. Those individuals bold enough to undertake a new business venture in this climate are the very people who are going to drag us out of recession.
Of course if this recession has taught us anything, it is that good business requires more than an appetite for risk. Everyone is learning that risk must be carefully managed. Our business is growing briskly because companies are looking to us to help them implement a proven, managed-risk strategy for growth: Franchising. Once again, our balanced approach to long-term growth is back in vogue... and it is a new, smarter breed of entrepreneur that we are seeing.
Entrepreneurs need a second chance. Those who built legitimate businesses that failed should not only be allowed but encouraged to try again. I think some might even be wiser the second time around.
Reported by Tony Urwin