Why do so many small businesses go bust in Canterbury?

Prof Richard Scase looks at why business can struggle in Canterbury

by Richard Scase

Small businesses are the backbone of our local economy. Leaving aside the public sector and the two major universities, the SME sector is the major employer and wealth creator.

Sadly, so many of them go to the wall in the first two years of start-up.

The reasons are varied, but too often would-be entrepreneurs do not do enough research before they put their hard-earned savings on the line.

They have a dream of a successful future business, but they fail to test the dream against hard-nosed reality. They act on the basis of rose-tainted glasses.

They fail to answer some basic questions. Will there be a demand for the product? Who and where are the potential customers? Will the prices they will need to charge cover their costs and attract customers?

Prof Richard Scase of the University of Kent

All too often would-be entrepreneurs underestimate their running costs.

They under- estimate the unreliability of staff and the cost of training them to become committed members of staff.

The quality of service offered by many small businesses in the hospitality and retail sectors in Canterbury is poor, mainly because of poor staff training.

On top of all this is the fact that Canterbury is an expensive place to do business. Rents and business rates are high.

In the retail sector national chains find Canterbury an attractive place to do business.

This inflates property rental values to the disadvantage of local entrepreneurs.

The result of these problems is that small businesses come and go, often with great rapidity.

The extreme outcome of this is the growing popularity of pop-up shops, as in Whitstable harbour in the summer or in vacated shops in the centre of Canterbury during the Xmas season. They open, trade for a few weeks and then close.

Some business observers would say there is a lack of business start-up advice in the district.

I disagree. There are tons of advice around. The problem is that those that go for the advice don’t need it and those that need it don’t go for it! Such has always been the history of entrepreneurship in the UK.

But I am hopeful for the new young digital entrepreneurs that are more and more appearing on the Canterbury business scene.

They seem to have more realistic assumptions based on well-grounded research evidence of their business prospects.

Richard Scase is Emeritus Professor in the School of Social Policy, Sociology and Social Research at the University of Kent. He is a leading authority on the future of business and socio-economic trends and makes keynote presentations all over the world. He lives in Canterbury.



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