05 Jul, 2012
James Caan On StartUp Loans
As announced at the end of May, EBA co-founder, James Caan was appointed Chairman of the Board on a new Government initiate distributing £82.5 million pounds to under 25s who have a great business idea and the passion to see this through to launch.
We’ve managed to grab some time with the man himself to discuss StartUp Loans in more detail and what this means for young entrepreneurs.
How did you get involved in the StartUp Loans project?
Lord Young, who is Advisor to David Cameron on Enterprise, approached me to get involved with StartUp Loans. I’ve supported government advisory boards in the past, but this opportunity really struck me as a project that has huge potential to really excite and encourage young people to start their own business.
With so many young people unemployed at the moment it’s so important that high profile business people, organisations and government do everything they can to inspire young people to be innovative and think that there are other possibilities outside of the job market.
What do you see as the biggest challenges facing young people trying to set up a new business?
Getting funding is typically the biggest barrier for anyone to start a business. For most young people, we believe StartUp Loans will be the only source of finance available to them. Some people might suggest that £2,500 isn’t a great deal of money but for a young person it would be enough to become a small enterprise, get up and running and become self-sufficient.
Money is just one factor though, getting really good advice along the journey is also essential for young people who are just starting out. That is exactly why I appointed Bev James as Director of Mentoring on the initiative.
Through this initiative we will put successful applicants in touch with a business mentor before the money is in place so they can start building a rapport with a person who will give them the help and advice they need. We’ve got a wide range of mentors in place so each young entrepreneur will have a local contact who has experience in their relevant field.
What do you look for in a new business idea or investment?
It’s often the simplest ideas that really catch my attention; the people who have worked on an existing product or idea and developed a way to improve on it. Easyjet didn’t bring down BA, for example, it simply offered an alternative service level of flights and opened up a new market.
The most successful business ideas are often simple, ingenious tweaks on an existing way of doing business, but delivering it faster, better, cheaper or more easily. You just need to work out your compelling selling point.
How can a young entrepreneur impress you and stand out from the crowd?
It’s the ones who show imagination, passion and persistence to get their message across. But also those who you know have really done their homework, who know their market and have worked through their numbers and their business plan thoroughly.
A successful entrepreneur is not someone who is looking to take the effortless route and be part of the crowd, it’s the individuals who are willing to swim against the tide in order to get ahead.
What would you tell your younger self if you had the opportunity?
Probably to be more measured in my approach. When I was younger I was typically fearless – and often reckless – and as a result I made some mistakes. I also would have told myself to take some occasional time out of my business (I worked 7 days a week) and do more networking.
I had the benefit of my father for general business advice when I launched my recruitment company (he had a leather workshop business) but I didn’t have a recruitment specialist I could turn to for market-specific guidance; that’s something I would have found incredibly useful.
What skills would you tell budding entrepreneurs they need?
Three words: passion, resilience and motivation. Starting your own business is never a walk in the park, but if you have the drive to make it work then you are so much more likely to succeed. Most of all, it’s an unquestioning belief in yourself and what you are doing that will set you apart.
It’s the same mixture of emotions that have fuelled my own career for over 30 years.
What’s the most common mistake people make when starting a business?
Research is absolutely fundamental to the business process, and it always surprises me when people don’t research their market properly. The knowledge you can gather talking to other people in your sector, doing online research or going to networking events is not just useful to know, it is critical to know.
At the very least it’s essential to know who your main competitors are, what they are offering and at what price point. If you go into it blindly you’re taking unnecessary risks.
What advice would you give a young unemployed person today?
I would say don’t ever assume that running a business is ‘just something other people do’. You don’t have to change the world and your idea doesn’t have to be ‘unique’. It’s more important to concentrate on the right idea and ideally one that matches your personal strengths.
My sister is a great example, she started from scratch simply selling samosas to her friends and family more as a hobby than a business. She’s now enjoying the success of her labours, running her own small factory and employing 15 people.