More than 300 British and American business owners, investors, government officials and journalists convened in London recently to exchange ideas and strategies aimed at encouraging entrepreneurial ventures on both sides of the Atlantic.
“Relations between the United Kingdom and the United States have never been stronger, deeper and more cordial,” said Gordon Brown, Britain’s chancellor of the Exchequer, the equivalent of the secretary of the U.S. Treasury.
Brown said that shared values bind the two countries, and that Britain is well-placed to act as a bridge to Europe for U.S. companies seeking to serve the 375 million people who live on the continent.
Open forums and informal discussions revealed that British entrepreneurs have a much tougher time than their U.S. counterparts when it comes to obtaining private funds to start businesses. Not only is there less venture capital available, but one speaker said a solid deal that would have taken 90 days to fund in the United States actually took a British company two years to complete.
“We need to make our economy more pro-competition and pro-enterprise,” said Brown.
The standing-room-only conference was co-hosted by U.S. Ambassador Philip Lader, who once served as chief of the U.S. Small Business Administration. Lader also hosted a corporate-sponsored Fourth of July party for 3,000 people at his official residence the day before the meeting. He pointed out that, while many American entrepreneurs are not fazed by their business failures, British business people consider it a total embarrassment.
“This is a culture that doesn’t recognize or celebrate failure,” said Jack Wyant, a venture capitalist from Cincinnati whose funds have invested more than $500 million in new companies.
Speakers ranged from Internet expert Esther Dyson to Jim Koch, founder of the Boston Beer Co. Koch said the best decision he made was asking his secretary to become a top executive in the firm. She recently retired after helping him grow the business to more than 200 employees. Sales for the first quarter of 2000 were $44.3 million.
“We make filet mignon; we can’t compete with McDonald’s,” said Koch, whose firm makes Samuel Adams Boston Lager, considered one of the top premium domestic beers.
Encouraging entrepreneurs
David Irwin, the new chief executive of the Small Business Service, recently established by the British government, said Britain is focusing more attention on small-business development.
“We need to do an awful lot more for business owners,” said Irwin. “Our culture values pop stars and footballers, while entrepreneurs are often treated no better than common crooks.”
He said one of his main goals is to change a law that requires ailing businesses to pay their taxes before they can pay other creditors.
“We aim to waive the ‘crown preference,’ and set up something more like your Chapter 11 bankruptcy proceedings to save more companies,” Irwin said.
Irwin said he hopes the British press will start focusing more attention on the positive accomplishments of entrepreneurs and not just the problems.
The British Treasury invited several American delegates to tour businesses outside of London. One group traveled by train to visit Luton, once a busy manufacturing area that is now economically depressed.
“Small shopkeepers have been squeezed out of business by the warehouse stores,” said Roy Davis, a city councilman who has served the Luton community for 17 years. He said Luton was once the home of several automakers and the center of the British hat-making industry.
“All these were good, quality shops on a prime Victorian street,” he said, during a walking tour of the town. Many of the shops are now empty, or filled with cheap discount merchandise.
“Luton, at one time, was the arson capital of the world,” he said, explaining that failing business owners would burn down their businesses to collect the insurance.
Davis said local merchants were also to blame for the blighted areas because they opposed closing the main streets to create a pedestrian-only area. “We’re now trying to attract an anchor store to build a new food-and-retail complex,” said Davis.
Hats aplenty
One of the bright spots on the tour was a visit to the W. Wright & Sons hat factory. The company was founded in 1890.
By the 1930s, there were more than 450 hat companies in the United Kingdom, many of them based in Luton. That was down from 7,000 “hatters” working in 1604.
“Back then, every single person wore a hat,” said William Horsman, chairman of the British Hat Guild, who purchased the Wright factory 24 years ago. The factory, which employs about 65 workers on-site and 10 more home-based workers, makes high-priced hats for the famous millinery designer, Philip Treacy, as well as a moderately priced line for department stores. The company has annual revenues of about $3 million, Horsman said.
Horsman, who was trained as a fashion designer and milliner, said he met Treacy at the Royal College of Art and became his mentor. Recognizing Treacy’s talent after he presented his flamboyant designs at a student show, Horsman provided funds for Treacy to open his own business. Horsman was an investor and director until he sold his interest last year.
His employees rely on 100-year-old machines to make straw and wool ladies’ hats.
Jane Applegate is the author of “201 Great Ideas for Your Small Business,” and is founder of ApplegateWay.com, a multimedia Web site for busy entrepreneurs. She can be reached via e-mail at [email protected].
