Support for enterprise

Enterprise support is the help an entrepreneur receives when starting up or running an enterprise. Some support is financial, meaning money, and some is non-financial: advice, training, legal help, accounting help, networking and recruitment support.

Sources of support include banks and other finance providers, business angels, local council enterprise departments, accountants, solicitors, friends and family, Chambers of Commerce, government and charities. Many of these give both money and advice, so one source can meet more than one need.

Formal and informal sources

Formal sources are organisations, such as a bank, an accountant, a solicitor, a council, the government or a Chamber of Commerce. Informal sources are friends and family.

Formal support is professional and specialist but may be costly, restricted, or only available if you meet eligibility rules. Informal support is free and immediate but less reliable, because a friend may be biased or unqualified, so free advice is not automatically the best advice.

Money for start-up and expansion

Finance can come from banks and other finance providers, business angels, government grants, local council grants and some charities. Banks may limit how much they lend and the repayment period under their own rules.

For example, someone selling handmade phone cases at weekend markets might pay a solicitor to check a supplier contract and ask the council's enterprise department for a grant towards a market stall: two different needs, two different sources.

Many local councils run an enterprise department, advice line or support centre for businesses. Its aim is to improve local economic growth by helping enterprises start, grow and create jobs. It does this by helping businesses seek grants, obtain guidance and find recruitment support.

Support on offer

An enterprise team can point you towards grants — money that does not have to be repaid — and give free help and advice. It can also offer recruitment solutions, such as helping you find staff or understand local training and work schemes. Because the team works in your area, it may know local demand, skills shortages and the kinds of businesses already trading there.

For example, a bike repair shop in a seaside town wants to employ an apprentice. The council's enterprise team knows about a local scheme that helps small employers take on trainees and can explain how to apply. It may also mention a small grant for equipment, though the grant might cover only part of the cost and only a few businesses may get one.

Strengths and limitations

So a council enterprise department is a useful local source of advice, recruitment help and possible funding, but it is not a specialist adviser and it cannot guarantee a grant or a quick answer.

An accountant is a qualified professional who keeps an enterprise in control of its money and its financial paperwork. A solicitor is a qualified legal professional who makes sure the enterprise acts lawfully. Both are professional, paid support, not capital, and most limited companies use an accountant.

Accountants

Accountants keep control of the finances and prepare the statutory end-of-year accounts that certain businesses must legally produce. They also handle tax returns and other statutory returns, and keep the financial records, so the owner knows what the business earns, owes and must pay to HMRC.

• Advantages: advice is qualified, impartial and up to date because tax rules change often. Correct returns avoid penalties, and spotting costs that can be claimed against tax can save more than the fees.
• Disadvantages: fees are expensive for a new enterprise with little spare cash, and a business with simple records may not get value for money.

Solicitors

Solicitors give legal advice on matters such as contracts and employment law, for example checking a lease or drawing up a contract of employment, so the enterprise acts lawfully.

• Advantages: they are qualified, and confidentiality rules let you share sensitive details safely. Their training makes advice knowledgeable, trustworthy, up to date and unbiased.
• Disadvantages: they usually charge by the hour, so they are expensive, and must be experienced in the right area of law. A family law specialist is not the right person to check a commercial contract.

Matching support to the need

For example, three friends who run a dog-grooming salon as a limited company pay an accountant to file the end-of-year accounts and tax return, and a solicitor to check the lease on a second salon and write a contract of employment for a new groomer. Paying the wrong professional wastes money: a solicitor cannot file your tax return, and an accountant cannot settle a legal dispute.

Friends and family are an informal source of support for an enterprise. They can offer help and advice, and may become quite involved — for example, helping you test a new product idea, run a market stall or talk through a pricing decision.

Their advice is usually free and immediate, so you can ask a question and get an answer quickly, without paying a fee or booking an appointment. It is also flexible and repeatable: you can go back as plans change and ask again. It may be based on personal experience, such as a relative who has sold goods at local markets. You may feel more comfortable asking someone close to you than a formal adviser, especially if you are worried or unsure.

However, this support has clear limitations. Advice from friends and family is heavily biased: they may want to encourage you, so they praise a weak idea rather than point out a flaw. They may be unqualified and may not understand your business, its customers or its costs. Their advice may be inaccurate, out of date, irrelevant or unprofessional. For example, a friend who has only worked in a large shop might tell you to order a huge amount of stock for your online phone-case business; that could tie up your money and leave you with unsold cases.

Friends and family are mainly a source of advice and support, not a guaranteed source of capital. They might lend money, but you should not assume they will; their main value is quick, familiar help.

A Chamber of Commerce is a business network: a membership group that connects business owners in a town or region, giving them a way to swap ideas, talk through issues and work out solutions together. It is not a free government department: businesses pay to join, and those fees usually fund the organisation.

Each local chamber creates a local network of owners, managers and professional contacts. It also links with chambers in other towns, regions and countries, so its reach can be wider than one local area. This can make it easier to find trusted contacts when trading abroad. For example, a small furniture maker who wants to sell to shops overseas might use chamber links to meet an overseas business contact and get help with import and export.

What a chamber can offer

Chambers can give specialised support to growing businesses, such as help with expansion planning or finding the right expert. Members also value them for getting to know other owners and for talking through difficulties, because a fellow member may already have solved the same problem. That makes a chamber useful when you need practical experience from other owners.

Limitations

• Membership fees can be a regular cost, so a very small enterprise must decide whether the contacts are worth the money.
• Meetings are held regularly, but the times may not suit you, and some sessions may not cover anything useful for your business.
• For a business-to-consumer enterprise, which sells directly to individual customers, networking benefits may be weaker. A dog-grooming salon needs local pet owners as customers, but chamber meetings are mostly filled with other business owners, suppliers and professionals, not its target market.

Government support

Governments can support enterprises by creating policies that encourage business growth, and grants — money given for a specific purpose that does not need repaying — are often available for costs such as equipment or training. Government decisions also affect enterprises: interest rates change loan repayments, tax rates change profits, foreign policy such as trade rules affects importing and exporting, and unemployment affects wage costs and customer demand.

Government support can provide financial and technical help, especially to first-time entrepreneurs. Some government departments also offer mentors and training, which build know-how and confidence alongside any money provided. Support is not only money: advice and training can matter as much as a grant.

The limitations of government support include information overload, because too much guidance can be hard to use. Support requirements may need to fit the government's agenda rather than your own priorities. Grants are also usually limited in amount, number and type.

Charity support

Some charities are set up to support local businesses, young entrepreneurs or enterprises trying to achieve specific goals. They may provide advice, direct help, training, financial support or investment, and can raise awareness of an issue.

Charity support can be zero or low cost and tailored to specific needs, so the help fits your exact problem. It may give access to a business adviser or mentor, and specialists can offer reliable, impartial help. For example, a charity that supports small craft businesses might give a jewellery maker free advice from a marketing volunteer and a small grant towards a stall at a craft fair.

Charities are limited by funding and are often specific about who they can support. Government and charities may provide training, mentoring and grants, but you must check eligibility and availability.

Choosing a source of support means matching the help you need to the organisation or person best placed to provide it. A need for money is not the same as a need for legal advice or local market data, so the right source changes with the problem. You should also weigh each source's advantages and limitations before recommending it.

What to consider

Justify the recommendation

A strong recommendation does not just name a source. It explains why that source suits the specific need and business context. For example, a skateboard clothing brand wants to start selling to shops in another country and needs help with export paperwork and finding overseas buyers. A Chamber of Commerce is a good recommendation because it provides import and export help and business networks, although membership may cost money. A solicitor could check export contracts, but would not usually provide overseas market contacts. The recommendation is justified by matching the need to the source and weighing cost and specialist knowledge.

Local market information

Local councils, government information and Chambers of Commerce can help with local market information and statistics. They may provide data on the local population, spending patterns, competitors or industry trends. This helps an entrepreneur judge demand and plan with evidence rather than guesswork. Remember that free help is not automatically best; check reliability and whether it fits your exact question.