This week, the Maple Review published its final report. Spearheaded by Small Business Britain, its aim is to identify and dismantle the barriers to entrepreneurship caused by economic deprivation.
The problem it identifies is one that resonates with us and many in our network. As Blair McDougall, the Minister for Small Business, puts it in his foreword, “talent and determination are spread evenly across society, but opportunity is not.” Or, to misquote Ratatouille’s Anton Ego: “Not everyone can become a great entrepreneur, but a great entrepreneur can come from anywhere.”
We aren’t just about high-growth companies. For a great many people, starting a business is a survival strategy — a way to take charge when the labour market isn’t delivering for them.
Back in January, I wrote here about the Financial Confidence Taskforce I chaired for Xero, whose report was written expressly to feed into this Review. I’m pleased to say it has. Financial confidence — the ability to read your own cash flow, price your work and stay on the right side of HMRC — is one of the Review’s eight recommendations. So is the case the Taskforce made for teaching business and enterprise in schools, not merely personal finance, which our own work with Young Enterprise had argued for too.
Elsewhere, the Review notes that the government’s Growth Guarantee Scheme only backs term loans above £25,000. For a kitchen-table business, £25,000 is an intimidating sum to borrow. The founders the Review studied tend to need somewhere between £500 and £5,000 — enough for a laptop, a van, some stock, the first few months’ rent — the range that commercial lenders find least worth their while, since a small loan costs almost as much to administer as a large one. The state fills part of it: Start Up Loans covers £500 to £25,000, but it lends only to businesses in their first few years, and its affordability checks screen out the thin-credit, no-savings founders.
The Review’s answer is a national micro-capital system, paired with light-touch support. There is even a precedent: the old Enterprise Finance Guarantee backed loans as small as £1,000.
The other barrier worth dwelling on is the welfare cliff-edge, because it is a clear case of the state tripping up the very people it is trying to help. Move from Universal Credit into self-employment and you get a twelve-month grace period; after that, the Minimum Income Floor kicks in. From that point, the system can treat you as if you are earning the equivalent of a full-time minimum wage job, even when your actual income is much lower. The result is that a founder can lose support because of uneven cash flow, which, as everyone reading this knows only too well, almost every early-stage business experiences.
The Taskforce’s own research found that more than a third of small business owners don’t know whether they made a profit last month, and Xero’s data shows that 94% of small firms have at least one loss-making month a year, with four or five being typical. A rule designed around predictable monthly wages is a poor fit for the messy reality of building a business.
The lesson running through the Maple Review is that entrepreneurship policy cannot just be about the next unicorn. As regular readers will know, we aren’t afraid of championing Britain’s most successful entrepreneurs, but we also need to recognise the millions of people for whom entrepreneurship is a route to independence, resilience and a better life. If talent really is everywhere, our job is to make sure the opportunity to turn it into a business is too.
Xero Hour
Relatedly, I’m delighted to share that Xero’s Laura Burley has joined us as an Adviser. My favourite section of all our Advisers’ profiles is when they give their take on the UK. Laura nails it:
“The UK has genuine, structural strengths as a place to build a business — and it’s important to say that clearly, because the story is sometimes told with more pessimism than the evidence warrants.
“Britain has world-class universities, a deep pool of financial and professional services talent, and one of the most dynamic startup ecosystems in the world. The fact that over half of our fastest-growing companies are co-founded by people who chose to come here and build their businesses on British soil says something powerful about our underlying appeal.
“We now just need to work a little bit harder to remove some of the barriers, listen to founders and unleash that growth!”
Insider Trading
We appreciate the time many of you put into filling in our surveys. That’s why we want to honour it with the new role of Insider.
As long as you’re a business owner, you become an Insider by filling in our Entrepreneurs Survey and opting to leave your email address when asked, or filling it out anonymously and signing up here as a Member and ticking the Become an Insider box.
In exchange for filling in our 10-minute quarterly survey — so, 40 minutes or so of your time every year — we’ll give you priority access to our events. In particular, our No Agenda Breakfasts. We’ll build this community over time as we have with others, but fundamentally we are looking for entrepreneurs who share our mission to make the UK the best place in the world to start and grow a business.
Seeds of Greatness
Over at The Generalist, Mario Gabriele has spent the past couple of months studying the childhoods of 260 exceptional entrepreneurs. The thing that unites them isn’t wealth, or the lack of it, but their experience of economic flux. While this is the beginning of a deeper study, early indications show that the founders he looked at grew up in families where their fortunes were rising or falling — scrambling towards a fortune, or watching one slip away: “Being moved by an economic vector is a more common pattern than belonging to a specific class.”
Saplings is the opener to a longer series, built from 260 founders, more than 560 books and 430 variables encoded for each one — everything from a father’s occupation to the number of times the family moved house. Most of that reading wasn’t done by a team of multilingual researchers but by AI agents working in parallel, one per book, with Claude doing the heavy lifting and a fair chunk of the source material in languages Gabriele doesn’t speak. I’ll be watching this closely.