They say if you are going to fail, fail fast. But while this is the standard advice given to entrepreneurs whose startups collapse in the first few years, it does raise the question: are some of these failures preventable? Theo Paphitis thinks so. The serial businessman, who left the BBC2 show Dragons’ Den last year, says the number of UK startups that collapse is unacceptably high. “50% of all small businesses fail in the first couple of years. It’s a damning statistic but it’s true,” he says.
There are a number of reasons why entrepreneurs see their fledgling businesses falter. “They haven’t done the research, they don’t know where to go for the right funding … it’s rarely one thing.” However there is a common theme, argues the retail magnate. “The reason people fail is because they don’t do their homework.” You wouldn’t sit an exam without doing any preparation, he points out. “A business is no different. It’s about knowing more than the next guy or girl and performing better, and the only way you can do that is through knowledge. It’s basic stuff but we don’t do it.”
The academic comparison is no coincidence. Paphitis, who is the owner of stationery, Robert Dyas home goods and Boux Avenue lingerie, is a passionate advocate of teaching entrepreneurship in schools. He believes it would lower the failure rate of UK startups. And it’s why he’s been involved with this year’s National Enterprise Challenge , an inter-school competition that involves children tackling “real life” business challenges. The contest, in its second year, was started by cousins Ben and Michael Dyer of Youth Enterprise, and more than 25,000 schoolchildren have taken part this academic year. was the headline sponsor.
Paphitis is also patron of the Skills Show, which is taking place at the NEC in Birmingham in November and aims to inspire young people to explore further education, skills and apprenticeships. “I’m incredibly passionate about business, about small businesses and about kids being given the right skills so they are successful,” he says.
He is convinced that this generation of young people is more enterprising than previous generations. TV programmes such as Dragons’ Den and The Apprentice, which are aired at peak viewing times, have raised the profile of entrepreneurship among youngsters and led to its growing appeal, he says. “It’s of interest to them, they see it as a career,” he tells the Guardian Small Business Network. “When I was on Dragons’ Den most of the letters I received were from people under 16. They wrote about their ideas, their views, their challenges. The audience is actually a very young audience.”
The traditional image of the entrepreneur has also changed, argues Paphitis. “Previously being an entrepreneur was seen as Del Boy-ish – ie, it’s funny, but could you make a living from it? There were high profile entrepreneurs like Richard Branson that the public were aware of but they were few and far between.”
When Paphitis was growing up, business skills were not taught or promoted at his north London school, he says. “There was an academic snobbery. When I went to school most parents wanted their children to get good A-levels, to go to university and get a degree, so your children had a better life than you. The way out of poverty was through a degree. But the whole world has moved on from that. A degree doesn’t guarantee you anything now.”
Paphitis, who has dyslexia , is calling for entrepreneurship to be incorporated into the national curriculum from the age of 11. “There’s no question in my mind that it should be part of the curriculum. That’s the ultimate aim.” He says children should be introduced to the topic from the age of 11, with the subject being taught more seriously for those in their later teens.
He points out that the subject is different to business studies or economics as it is much more practical. “Entrepreneurship can be taught to people with average academic abilities – the proof of that is everywhere you look.”
If young people were better equipped with enterprise skills, more startups would succeed, and the impact on the economy could potentially be huge, says Paphitis. “Fifty per cent of the UK’s GDP comes from SMEs (small and medium-sized enterprises) and social enterprises. And we know that 50% of small businesses fail. So with every 1% we can improve, think of the effect on the UK’s GDP.”
Source: The Guardian