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Pick of the crop

Small businesses in the North East now lead the rest of the country in the fightback to economic recovery, and top entrepreneurs are scaling up their support.

If bankers have it right this time, small businesses in the North East are leading the rest of Britain in the nation’s battle for economic recovery. Confident this is so, top entrepreneurs of the region are intensifying their support for these new bravehearts.

A “get up and go” flame already lit is firing the North East’s small businesses up to the top of the index in the annual Barclays Business Regional Impact Index.

The index, started last year, says the North East is the region benefiting most from their SMEs and, crucially, the role they are playing in boosting recovery across the country. Thus the North East is three places up to first place, displacing London.

“For the North East to be top of the tree like this is testament to the confidence people here have in the region’s economy,” says Nigel Mills.

“It encourages us to think there has never been greater need or opportunity than now for an organisation like the Entrepreneurs Forum to share its expertise and encourage the pacesetting SMEs to grow even faster.” Mills himself is one of the region’s alreadyproven entrepreneurs and a board member of the Forum for whom mentoring features highly among its priorities as it encourages, develops and grows entrepreneurship in the region.

Further to this end, the Forum is “reenergising” while also relaxing its rules of membership as it nears its 10th birthday.

It plans by these means to intensify its reach into the region, and its encouragement of self-start novitiates.

Professor Robert Blackburn of the Small Business Research Centre at Kingston University, who developed the Index, says: “The North East’s top place could be down to its entrepreneurs having a long-standing propensity to innovate and export beyond their limited regional market – in contrast to those enjoying close proximity to larger metropolitan markets.” The study observes that North East SMEs are driven by a strong performance in investment, innovation, proportionate turnover and firms that were born global.

The index, based on analysis following in-depth review of around 1,000 owner-managers, points out that the North East SMEs have committed, on average, 20% of their income to innovation – the highest of any region.

“This commitment appears long-term,” the survey adds.

“Clearly these firms are taking a longer-term view on their business and are investing heavily for the recovery.

Innovation has been especially important for SMEs in manufacturing.” It says North East firms interviewed had cut their headcount by 1% on average, unlike a trend to jobs growth in other regions.

In short, the index suggests, businesses in the North East are showing jobless growth in a drive to leanness and efficiency.

But they expect considerable jobs growth next year – by up to 20%, as they anticipate markets to improve.

The study ranks each region on 13 key indicators that include outlook on growth, job creation and expected profit.

To flare enthusiasm locally, the Entrepreneurs Forum has prepared a list of 42 inspirational events for its current working year, and is enlarging its board from 11 to 14 members to be more “hands on” in Forum activities.

This enlargement, among other things giving Teesside and Durham greater involvement, is also expected to widen the board’s skills base, intensify and generally diversify the Forum’s reach into the region.

The organisation says it is systematically building on its programme of entrepreneurial culture and mentoring. The latter has always been a priority, with more experienced Forum members helping individuals and joint venturers early on in their business building.

The knowledge and expertise to be drawn on has come from seasoned entrepreneurs such as Tom Maxfield, Sir Peter Vardy, Paul Walker and John Hays, as well as younger ascendants.

Nigel Mills and Lorna Moran have outlined to BQ some of the Forum proposals, which include the 42 events promoting an entrepreneurial culture.

Mills, who recently enhanced his personal fortune by selling many of his Mills stores to Tesco, continues to exercise his skills through Closewalk property company at Whitley Bay.

Moran is chief executive of NRG recruitment group, also vice-chairman and a co-founder of the Forum.

They say the bigger board will step up the pace at a time when membership, usually grown by word of mouth, stands now at 470, thanks to a recent spurt of applications. A total of 500 is the aim by Christmas. In addition, the Forum has a new and widely experienced executive director, Nicola Short.

Formerly marketing head of the urban regeneration body 1NG and Newcastle- Gateshead marketing agency NGI, she also worked in marketing for Sage and Newcastle Building Society.

Her appointment follows the departure of Carole Beverley, who was chief executive for eight years until going into IT as group marketing and communications director of Technology Services Group.

Mills says: “The augmented board will be capable of leading the region’s entrepreneurial agenda. It will mark our first 10 years with fresh objectives and a sense of re-engagement that will further both the Forum’s development and its fellowship.

“The extra members will reflect an analysis of industries in the North East and a good representation of them,” he adds.

The bigger board, besides, will be reworking the Forum’s finances ahead of the imminent demise of regional development agency One North East, and the £300,000 support it previously gave the Forum yearly. Lorna Moran says: “One North East did a great job supporting the Forum in its embryonic years.

Now the Forum has reached critical mass and is able to operate on its own. We’ve had the money and spent it wisely, and now we must be more entrepreneurial, which is what we want to be.” Revenue streams continue to flow from membership fees, five powerful corporate partners, sponsorship, and income from events. Support from within is good, Moran says, but stresses: “We have no commercial element, which is what makes us different. Nor have we plans to that end.

Through our members and indeed non-members who value our aims and support us, we can be altruistic.” She points out that the Forum’s tooling up comes in readiness for a new wave of would-be entrepreneurs. “Statistically, entrepreneurship has been growing in this region for over a decade,” she says.

“Now, coming out of a flat economy, there’s a new wave of entrepreneurial people who are being displaced from the public sector by redundancy under the Government’s spending cuts. The public sector in this region employs 25% of the workforce.

If we can bring on entrepreneurship from there it will also be a generator for the other 75% of the region’s workforce.” A second survey circulating, this time by business advisors Deloitte, suggests growth also in the middle area of the region’s economy.

It concludes that most of the North East’s entrepreneurs are growing their business at least as well as they forecast, with six out of 10 stating that revenue growth met or exceeded their expectations, and with widespread optimism that further growth would be seen in the next 12 months – some of it in double digits.

The Barclays and Deloitte reports, together, offer some re-assurance, perhaps, in face of The findings by business rescue and recovery specialist Begbies Traynor is that levels of business distress in the North East rose faster than anywhere else in the third quarter of this year – 19% up on the previous three months.

Either way, Moran is prompted to point out: “A successful emergence from the present economy has got to be business-led. There isn’t anything else left any more. Business has to lead us back to better times.” She has concluded that while entrepreneurs elsewhere in the country, including London, have their organisations too, there’s nothing anywhere run quite like the Forum.

Maybe the nearest is the Entrepreneurial Exchange in Scotland, with which the Forum enjoys close relations. The one thing that’s certain in Mills’ mind: “The Forum is needed to knit things together in the North East economy.” Self-employed people anywhere between Berwick and Teesside and across to Cumbria’s border may apply for membership of this organisation, already widely representative both of the geography and of the region’s mix of manufacturing and services.

A unique feature is its layering of membership which reflects a combination of experience, turnover and the stage a company is at: Master level members have already built substantial businesses; many are serial entrepreneurs and among them are the Forum’s founders, of whom more than 30 have been involved for nine years.

Full and associate level members pay a fee based on their firms’ turnovers for the same benefits; they’ve established businesses, are looking for growth and understand the value of learning from their peers.

Then there’s a nurturing pool open to ambitious pre-revenue businesses, offering a connection with more experienced members and perspectives that will be invaluable as they develop and transform ideas into reality.

A new honorary level of membership – “an ambassadorial role” – has been introduced and, to the Forum’s delight, multi-millionaire entrepreneur Graham Wylie has agreed to be first so designated.

Finally, in a new membership policy, the Forum from next year is likely to let business leaders and senior management teams join, in addition to business owners. Spire Hospital at Washington expects to provide the first members here. Mills says response was “fantastic” when three more volunteers were sought for the board.

Moran says: “These are people with little spare time, and who get no financial recompense for their priceless input, indeed probably end up out of pocket.

They pay their membership subscription like everyone else. They do the work because a lot of successful people struggle to know how to give back and share their knowledge. The Forum gives the platform facilitates that.” Any thought that the Forum is a mutual benefit society can be dismissed, knowing that to date it has given to local charities (always its preference) £349,656. This has supported the likes of St Oswalds, Macmillan, Percy Hedley Foundation, Teenage Cancer Trust, Grace House and Maggies.