Guest Interview: Charles Cracknell, June 2009

Whilst access to finance is continually important for entrepreneurs, this is now even more important than ever. Make Your Mark’s most recent competition, Make Your Mark with a Tenner, however, highlights just how enterprising young people can be with a little bit of money and a lot of enthusiasm. We decided to interview Charles Cracknell, Employment and Youth Enterprise Manager at Hull City Council, founder of the Hull Youth Enterprise Bank and recent winner of the Queen’s Award for Enterprise Promotion, on young people, finance and what the government should be doing…

57% of young people perceive access to finance as the greatest barrier to starting a business, in your experience, how can access to finance be improved for young people?

“Making the processes a lot simpler - one of the reasons why we set up the Youth Enterprise Bank, giving between £500 and £1000 to young entrepreneurs, is to do exactly this. The young person only has to fill in a pro forma and a business plan. Within two to four weeks we turn the application around and they can come in and pick the cheque up. We trust the young person, and actually say to them, ‘this is about trust; you said you were going to do this, we’re trusting you with the money, off you go’.”

“Other funds are very much process-driven - asking for bank account checks for example. That certainly puts off those under 19. When young people want support, and they want the finance, I think we need to be flexible in our approach.”

Should people who are under 18 be allowed to have business accounts?

“Certainly! There’s one young man who’s running a business in Hull with 42 people working for him, and his company has now been owned by two different people, because he was under-18, in order to get him registered with the bank. Fortunately he is lucky and older friends and parents who were able to help out, but others are not always so lucky. Young people must be taken seriously.”

Do you think that the model that you’re using, basing finance on trust, would be scalable across the UK?

“I would like to expand what we’re already doing in Hull to become Humber-wide, and then from Humber to Yorkshire, and then to other areas – but there’s not many areas that seem to want to take the risk. We’re prepared to take the risk.

However, our scheme can be replicated and should be targeted at the 19 and unders that have the most difficulties in the initial stages. The Youth Enterprise Bank has been funded occasionally by private sector companies, young people themselves putting money back in, and the council. Although it’s small, we have just worked out that it has given over 80 grants in five years, of over £133,000, so small, local schemes can make an impact.”

Is there more that could be done for young people in terms of business support?

“Yes. I think that there should be ‘enterprise advisors’, as opposed to ‘business advisors’, who should be people who are in business. Business advisors are doing a great job, but if they aren’t running a business, they don’t necessarily gain the respect of the young person, and the young person doesn’t necessarily have the confidence to ring up and ask about a problem that they are, for example, having with their cash flow. With our approach, the enterprise advisor should already know the young person has an issue with their cash flow, and should already be saying, ‘do you think you might have an issue here?’

Other programs that are available, such as business support seminars, should definitely still continue, but having someone who runs a business providing the support is the best way forward - and if that can be a young person, even better.”

The Government has proposed the idea of a new public/ private partnership investment fund, similar to the old 3i, is this something that the government should be doing?

“It’s a good thing, but I do worry that it might become burdened with bureaucracy. I’d like to see the government devolve some of the responsibility to localities, so that youth enterprise banks could manage and operate a certain amount in their immediate region or sub region, giving them the opportunity to really make the fund have impact on the ground. People must appreciate that you need a great deal of flexibility dealing with this particular group.”

June 2009

Charles Cracknell was interviewed by Jonathan Oldershaw, for more information contact Jonathan at [email protected] or on 0207 430 8041.