Let's be more tolerant and supportive of honest failure
We need to do more to support risk-takers in business, writes BWG boss Leo Crawford
Published 24/05/2015 | 02:30
The success of our company, BWG, is as a result of the close relationships that we have developed with over 1,000 small and medium-sized business entrepreneurs, who we count among our primary business partners.
As owners and operators of the Spar, Eurospar, Mace, XL and Value Centre brands, along with our professional supply division, we rely hugely on risk-taking entrepreneurial spirit and have a great interest in ensuring that business creation and ownership is encouraged and facilitated where possible.
In general, Ireland has a positive attitude towards risk-taking when compared with other European nations.
According to an EU report on innovation published in 2012, "Ireland is a country where innovation finds fertile ground" and entrepreneurs benefit from positive media attention and are perceived as positively contributing to society. It also found that being successful at starting a new business in Ireland bestows a high level of status and respect.
That's all well and good when things go well, but entrepreneurship is about taking risks - and the nature of risk is that things don't always turn out the way you hope or expect.
The challenge for risk-takers in Ireland is that, while we are happy to applaud their successes, we seem to be less tolerant and supportive of honest failure. It's not surprising, therefore, that the fear of failure is greater in Ireland than in other countries, especially the US. Likely accentuated by the negative rhetoric that surrounded us throughout the recession, the same EU research also flagged that fear of failure among the Irish entrepreneurial adult population had risen sharply since 2006.
The fact is that Ireland needs risk-takers. Without them there wouldn't be a Ryanair, Glen Dimplex, Realex, Paddy Power, Stripe, or a Smurfit Kappa, to name a few. There also wouldn't be those thousands of smaller businesses and family firms spread across the country made up of local retailers, builders, manufacturers, publicans, service-providers, etc. Common to all risk-takers is a natural disposition for idea-generation, identifying gaps in the market and business development.
The majority of early-stage entrepreneurs (85pc) expect to create employment, with 22pc expecting to become significant employers, according to Ireland's latest country report published by the Global Entrepreneurship Monitor (GEM). For six in every 10 entrepreneurs in Ireland, their ambitions extend beyond Ireland, as they hope to exploit the export potential of their ideas.
There's also the related issue of ageism, and the preconception that people of a certain age are too old to become entrepreneurs. The GEM report found that the majority (62pc) of entrepreneurs in Ireland were aged between 25 and 44, while only 4pc were aged between 55 and 64. People are living longer, and hence, the lifespan of the average career is widening, meaning we must create new and innovative ways of keeping people in employment and especially in entrepreneurial endeavours where their experience (the successes and the failures) will count for a lot.
Apart from public attitudes, we also need to look at the financial supports in place for newly unemployed business owners.
Some schemes are in existence and are effective, such as the 'Back to Work Enterprise Allowance' initiative, along with the 'Start Your Own Business' and 'StartUp Refunds for Entrepreneurs', initiatives specifically mentioned in the Government's recent Spring Economic Statement. But the supports are limited.
An initiative based out of the North called the Value of Failure project, which is funded by the European Union in partnership with Enterprise Northern Ireland, is aiming to develop a second-chance entrepreneurs' alliance in an effort to change attitudes about business failure by educating banks and finance providers to think differently about business people who failed in their first attempt.
Implementing a similar structure would not only help in changing negative attitudes towards honest failure, but it would also create a fraternity within which entrepreneurs could exchange experiences in an effort to educate their peers.
Government also has a part to play, and indeed, has a vested interest in, encouraging risk-taking as this ultimately leads to job creation, a central pillar of the Coalition's recovery strategy. The Taoiseach, in his recent speech at Ibec's CEO conference, described the higher rate of tax for the self-employed as "discriminatory". The indications are that Fine Gael has already examined the possibility of reducing the higher rate of USC paid by business owners, bringing it in line with PAYE workers. The Government party has also signalled plans to introduce a benefit structure for the self-employed. These would be helpful incentives.
Furthermore, the bankruptcy terms in Ireland far exceed that of the UK and other peer nations. It is a contentious topic, however there is a strong case for reducing the term to one year, or for individual cases to be assessed on their merits.
Given the size and scale of BWG, we have been fortunate to advise and support indigenous start-up food companies over the last number of years, very much in keeping with our local ethos. This strategy has helped support some of Ireland's fastest-growing food brands, and has also helped to ensure that we stock the very best produce on offer through direct engagement and mentoring.
By encouraging a culture that supports risk-taking and business creation, across all sectors of business, we have an opportunity to create a hedge against future global economic crises by developing enhanced economic diversity.
While not every idea is worth pursuing, for those that are, we should do everything we can to encourage future success. We have the appetite for risk-taking in Ireland, we just need to show more support to those that are prepared put everything on the line.
Leo Crawford is CEO of BWG Group
Sunday Indo Business