Friday, 30 September 2011

Entrepreneurial rhubarb

I was listening to some Labour shadow minister on the radio. 'The biggest obstacle to people setting up their own businesses is lack of capital,' he said. Utter rhubarb. The biggest obstacle that prevents most people setting up their own business is that they don't really want to start their own business. Certainly not enough to put the time, effort and money in. They want someone to give them a job. And that's fine. But Labour shouldn't imagine there are millions of people who would be entrepreneurs if they only had that startup capital.

Now you may say, 'They do need some money,' and that's true. But it's often not the case that you need huge capital investment to start a business. Need a computer? - the price of 10 cigarettes a day will cover it. Need a website? - easily covered by the cost of a basic Sky subscription. Both expenditure that many people looking for jobs these days would consider part of everyday life.

To be honest, I also get more than a little narked by the way governments of all colours disregard people who just get on with it and earn a living self-employed or running their own company, without necessarily employing other people. You'd think the only good company is one that employs others. Yet there are millions of us beavering away, making money for the country, gaining exports, paying taxes, all without ever employing anyone else, or wanting to. Joining this forgotten army, starting your own business, doesn't have to depend on a huge injection of capital - this is a myth that seems to depend as much on Dragon's Den as it does good economics. There are plenty of ways to take a little ingenuity and very little cash and earn a living.

Let me stress, I'm not saying everyone who is unemployed should start their own business. It's not for everyone, and I accept that. But we would do a lot better making it more attractive in tax terms to work for yourself, even if you don't employ others, that worrying so much about startup capital.

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